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Section 15: Mode of payment of wages

The Code on Wages, 2019 (Act No. 29 of 2019) • Official Statutory Text & Plain English Practice Guide

Statutory Mandate
Chapter III: Payment of Wages
Competent Labour Forum
Act No. 29 of 2019
Section 14 All 67 Sections of Code on Wages, 2019 Section 16

Legal Commentary & Landmark Judgments: Section 15

Section 15 of the Code on Wages, 2019 establishes the mandatory statutory modes through which employers must disburse wages, restricting payments strictly to legal tender currency coins, currency notes, cheques, direct bank account credits, or approved electronic clearing systems. By codifying an exhaustive list of lawful payment instruments, the statute legally extinguishes archaic practices of remunerating workers in kind, company store tokens, promissory vouchers, or commercial scrip, ensuring that every employee receives unencumbered, liquid legal purchasing power.

  • Negotiable Instrument Classification: The statutory proviso confers substantial regulatory powers upon the Appropriate Government to mandate, by official gazette notification, that wages in designated industrial or commercial establishments must be disbursed exclusively via crossed cheque or direct electronic bank transfer.
  • Digital Infrastructure Jurisdiction: This digital transition is designed to eliminate systemic corrupt practices such as phantom muster rolls, middleman wage skimming, and unauthorized cash kickbacks in labour-intensive sectors.

Disbursing wages outside these approved legal mechanisms constitutes an actionable contravention under Section 54, and employers cannot defend cash-flow deductions or unverified disbursements without producing certified digital banking records or bank transmission logs before the Section 45 claims authority.

Key Landmark Precedents:
  • Workmen of Bharat Petroleum Corporation Ltd. v. Bharat Petroleum Corporation Ltd. (2000) 1 SCC 252: The Supreme Court affirmed that wages represent the worker's fundamental means of survival, holding that statutory wage payment modes must be strictly enforced to prevent arbitrary deductions and ensure transparency in industrial remuneration.
  • Kesoram Cotton Mills Ltd. v. Gangadhar (AIR 1964 SC 708): The Supreme Court emphasized that payments in substitution of cash wages without statutory backing are illegal and unenforceable against industrial labour.
Legal Commentary:

The statutory transition toward electronic wage crediting establishes an indelible evidentiary audit trail. Employers who default on digital wage mandates bear the entire burden of proof in unpaid wage claims under Section 45, as uncorroborated cash payment vouchers carry diminished evidentiary weight before labor authorities.

Section 14 All 67 Sections of Code on Wages, 2019 Section 16