No More Compulsory Wage Payment to Employees

There is No More Compulsory Wage Payment to Employees – Government has announced that there will not be any compulsion on the private companies to pay the wage for the lockdown period to employees. Government has also withdrawn its March 29 circular wherein it had asked private establishments, including MSMEs to pay full salaries to their employees irrespective of their presence in the workspace due to Covid-19 lockdown.

The Ministry of Home Affairs had on Sunday issued revised guidelines to be applicable during the fourth phase of the coronavirus-forced lockdown. The fourth phase of lockdown came into effect from Monday and will continue till May 31. The fresh guidelines repealed the March 29 circular which made compulsory wage payment to workers. Save as otherwise provided in the guidelines annexed to this order, all order issued by the NEC (national executive committee) under Section 10(2)(I) of the Disaster Management (DM) Act, 2005, shall cease to have effect from 18.05.2020,” the Ministry of Home Affairs said in its latest order.

The decision has come on the ruling of supreme court where it had stayed the operation of the MHA circular asking private companies to pay full salaries to their employees. The apex court asked the Centre and states not to prosecute private firms, factories and others over non-payment. The court stayed the MHA order on petitions filed by companies including Ludhiana Hand Tools Association and Ficus Pax.

The petitioners had sought the quashing of the circular and expressed fear that making such payments will lead to the closure of many of the units and will ultimately cause permanent unemployment.

Ministry of Home Affairs had issued the circular amid fear that private companies cutting wages and laying off people due to reduced business and revenues during the lockdown period.

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