Cash Payment to Employees to be Banned in Pakistan

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cash payment to employeesIt is expected that cash payment to employees may soon become a history. It is done to ensure labor rights and regulate wages. This law is applicable on any company that has more than 15 people on the payroll to pay workers through the banking system.

Committee on Interior passed the Payment of Wages (Amendment) Bill 2017, when the bill will pass the parliament it will eliminate cash payment to employees.

The move is taken to stop undocumented follow of cash. Furthermore, it also leaves the economy undocumented. The true statistics are not available. Moreover, cash payments also make tax evasion easier.

It was stated that employers, particularly working in the construction incline towards cash payments to employees. It allows them to stay out of the prescribed system.

Senator Muhammad Javed Abbasi moved this bill. It will make employers who have more than 15 persons on their payroll to pay salaries either through cheques or account transfer.

Furthermore, Mr Abbasi informed that this move will lead to employees taking legal action if the rights are violated.

Committee Chairperson Senator Rehman Malik said that, “I propose that employers also be bound to arrange for opening bank accounts of their employees.” He further added that “Opening a bank account is not an easy task for an ordinary laborer like those working at brick kilns.”

His recommendations were taken on board. The draft law now will be tabled in the Senate for vote, to be passed and then tabled in National Assembly.

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