CAPSI Urges Ministry of Labour & Employment to Resolve Disparity in Responsibility for Payment under the Code on Wages Act, 2019
New Delhi – As the government continues to emphasize the importance of labour welfare and timely wage payments, Central Association of Private Security Industry (CAPSI) has raised an urgent concern regarding the implementation of provisions under the Code on Wages Act, 2019, specifically Section 54(a), along with the associated Code on Wages (Central) Rules, 2020.
The issue primarily pertains to the timely payment of wages to employees engaged through contractors—such as Private Security Agencies (PSAs)—and the need to establish shared accountability between the contractor and the service taker (client/establishment).
Section 54(a) of the Code on Wages Act, 2019 states:
“Any employer who—(a) pays to any employee less than the amount due to such employee under the provisions of this Code shall be punishable with fine of fifty thousand rupees on every violation.”
While the intent of this provision is clear and necessary, there is a growing concern that penalties are being considered against contractors even in cases where the service taker has failed to make timely payments to them—thereby creating a situation where contractors are held accountable for delays beyond their control.
In this context, the following amendment is strongly recommended to be incorporated into the Code on Wages (Central) Rules:
“Timely Payment of Wages.—Where the employees are employed in an establishment through contractor, then, the company or firm or association or any other person who is the proprietor of the establishment shall pay to the contractor the amount payable to him or it, as the case may be, before the date of payment of wages so that payment of wages to the employees shall be made positively in accordance with the provisions of Section 17, subject to the contractor receiving payment of wages for the previous month from the service recipient on or before the 7th day of every month.
If the contractor fails to pay wages on time despite receiving timely payment from the service taker, a fine may be imposed.”
This proposed clarification ensures a fair and balanced approach, where liability for wage delays is assessed based on actual circumstances. It recognizes the operational dependency between contractors and clients, and promotes timely invoice processing and payments by the service takers.
Chairman Kunwar Vikram Singh voiced serious concern over the draconian clause, stating that if not addressed, it could have a devastating impact on the Private Security Industry. He cautioned that it might result in the closure of thousands of private security agencies, jeopardizing the livelihoods of lakhs of contract workers and undermining the vision of a Viksit and Surakshit Bharat.
He strongly urged the authorities to take immediate action and introduce the necessary clarification to safeguard the interests of all stakeholders and protect the future of Private Security Industry that heavily depends on contractual manpower.
