Monthly Wages- Mode of Payment 

Employment Act 1955

Part V Section 25

 

Wages to be paid through bank

Employment Act Section 25(1)

Wages to any employee shall be paid through payment into an account at a bank, finance company, financial institution or other institutions licensed or established under the Banking and Financial Institutions Act 1989 [Act 372].

 

Scenario

“Employee A joined a company which pays monthly wages through bank.

Employee A would like to receive his salary by cheque.”

Question:

Can the company reject the request?

 

Payment of wages other than through bank

Employment Act Section 25A (4)

The notice on the mode of payment shall take effect four (4) weeks beginning with the day on which the notice is given.

 

Payment of wages other than through bank

Employment Act Section 25A (5)

The request of the employee to the mode of payment of wages shall not be unreasonably withheld by the employer.

 

Conclusion

• Employee upon submit a written request, wages can be paid in legal tender (cash) or by cheque
• Employer cannot unreasonably withhold or reject employee’s request

 

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