Payment of salaries to employees through the cashless mode has been made mandatory by the government.
Amendment to the Payment of Wages Act, 1936 was cleared by the Union Cabinet to pay employees via electronic mode, cheques and also in cash.
An ordinance to amend an act has a time limit of six months. During this time, the government is required to get the same passed in Parliament.
Under the Payment of Wages (Amendment) Bill, 2016, the section 6 of the 80-year-old Act is to be amended to allow employers pay wages to employees through cheques or by crediting the amount to their bank accounts.
Labour Minister Bandaru Dattatreya introduced the Bill. The new amendment will serve the aim of cashless economy, said the Bill.
The Centre can make rules regarding payment of wages in relation to railways, air transport services, mines, oil fields and its establishments while states take a call on all other cases.
Andhra Pradesh, Uttarakhand, Punjab, Kerala and Haryana have already made provisions for cashless payment of wages by making state-level amendments to the Act.