The Labour Department has initiated steps to implement an electronic salary transfer system that seeks to ensure wage protection and end the exploitation of staff in unaided schools, self-financing educational institutions, private banks, and hospitals, among other sectors in the State.

Under the proposed system, payment of salary in private institutions will be made mandatory through bank accounts and the Labour Department will introduce an online monitoring mechanism to ensure that the interests of employees are protected.

The system has been mooted in the wake of a flood of complaints from employees in private banks, hospitals, unaided schools, and self-financing colleges that they are being exploited by their employers.

Though the government has fixed minimum wages for employees in different sectors, several employers refuse to comply with the norms and compel their staff to work for meagre salaries.

A majority of them meticulously maintain the documents, but tend to evade the norms through voucher payments. Complaints of increasing workload, denial of mandatory holidays, and other basic facilities have also been raised by employees. It was in this context that an official delegation comprising Labour Secretary Anil Xavier, Labour Commissioner T.T. Antony, and Overseas Development and Employment Consultants Limited (ODEPC) managing director G.L. Muraleedharan visited the United Arab Emirates (UAE) on an official mission and studied the WPS (wage protection system) system developed by the Central Bank of UAE since September 2009.

The delegation proposed to emulate the system here and Labour Minister Shibu Baby John is understood to have given the go-ahead. Initially, the system will be introduced in private educational institutions, textile shops, jewellery shops, IT companies, and the construction sector.

Employers will have to furnish the details of the staff, their bank accounts, and the salary drawn by them to the Labour Department. Payment of salary on a fixed date will be made obligatory and district labour officers will verify whether employers have complied with the system.

On learning that certain private managements which are already making payments through the bank tend to forcefully take signed cheques from their employees and draw a substantial sums from their accounts, the department has decided to work out a new system to prevent such exploitation, sources said.


  • Payment of salary through bank accounts
  • District labour officers to monitor the system

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