Dec 212016
 

Salary Only through Cheque or Direct bank Transfer | No Salary in Cash – Government Ordinance

On Wednesday, the Cabinet has passed an ordinance which states that the employees have to receive their salary in electronic mode or through cheques. So now the government employees and the daily wage laborers have to receive their payment via these methods only. If any department or employer was not doing that, then they will have to immediately start doing it.

Salary Only through Cheque or Direct bank Transfer

Things to note

  • This new ordinance has been approved since there has been an amendment to the Payment of Wages Act. According to this Act the employers had to disburse payments in cash, but now as per the amendment they can do so through online modes and cheques.
  • However according to the government sources, there hasn’t been a complete ban on the cash payments. Employers also have the option to pay via cashless payments. But for some time, until the infrastructure for the same is not being created, they will have the option to pay in cash.
  • These steps have been taken to protect the workers and employees against exploitation. It is also a push to the society towards becoming completely cashless.
  • This new scheme is currently applicable only to the public sector with the private sector having to access this later. At present the daily wage workers and the employees both are to be affected by this move.

However the thing to note here is that a society cannot become completely cashless. Hence, the cash transactions are not being completely banned. This however does not guarantee that in future it will not implement the rule of complete ban on cash.

Why was this ordinance passed?

There were technical factors that governed this decision. There was a bill that was all set to be tabled at the Lok Sabha on 15th December 2016. Later, it was to be pushed at the budget session next year. However, the government did not want to wait for two more months. Right now with the usher of demonetization, people are already trying to use cashless methods of payment. Hence, according to the officials, this was the right time to introduce this ordinance.

Therefore this ordinance has been passed for these two months and later it can be introduced and passed in the parliament as well.

Implementation and objectives

It has already been implemented in the State level by Punjab, Kerala, Andhra Pradesh, Haryana and Uttarakhand. Hence, the state level provisions have already been made for this purpose. These states now have the option to accept payment and send wages through cheques and electronic transfer.

Right now the employee needs to give a written authorization to be able to get the payment in his or her bank account transferred directly or via cheque deposit.

The objective of this new scheme is to implement digital economy and to make the country cashless. This is one of the prime motives in making these changes and it seems to be very much working via these methods.

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