Updated: 16 September 2026
Sections 16 and 17 of the Code on Wages, 2019: Wage Period and Time Limit for Payment of Wages
Sections 16 and 17 of the Code on Wages, 2019 regulate how an employer fixes an employee's wage period and when wages must be paid. These provisions are important for both employers and employees because they prescribe the permitted wage cycles and clear payment deadlines.
The official text of the Code may be read on the Ministry of Labour and Employment website. The Ministry also published draft Code on Wages (Central) Rules on 30 December 2025. Users should check the latest Central and applicable State rules and notifications for establishment-specific compliance.
Section 16 - Fixation of Wage Period
Meaning: A "wage period" is the recurring period for which wages are calculated and become payable. Section 16 permits an employer to fix the wage period as daily, weekly, fortnightly or monthly, but no wage period may exceed one month.
Text of Section 16
16. The employer shall fix the wage period for employees either as daily or weekly or fortnightly or monthly subject to the condition that no wage period in respect of any employee shall be more than a month:
Provided that different wage periods may be fixed for different establishments.
What Section 16 requires
An employer may choose a daily, weekly, fortnightly or monthly wage cycle. The outer statutory limit is one month. The proviso also permits different wage periods for different establishments. Section 16 should therefore be read with Section 17, because the chosen wage period determines the deadline for actual payment.
Section 17 - Time Limit for Payment of Wages
Meaning: Section 17 fixes the latest time by which wages must ordinarily be paid for each permitted wage period. It also provides a separate deadline when employment ends because of removal, dismissal, retrenchment, resignation or closure of the establishment.
| Wage basis | Payment deadline under Section 17(1) |
|---|---|
| Daily | At the end of the shift |
| Weekly | On the last working day of the week, before the weekly holiday |
| Fortnightly | Before the end of the second day after the end of the fortnight |
| Monthly | Before the expiry of the seventh day of the succeeding month |
Text of Section 17
17. (1) The employer shall pay or cause to be paid wages to the employees, engaged on-
(i) daily basis, at the end of the shift;
(ii) weekly basis, on the last working day of the week, that is to say, before the weekly holiday;
(iii) fortnightly basis, before the end of the second day after the end of the fortnight;
(iv) monthly basis, before the expiry of the seventh day of the succeeding month.
(2) Where an employee has been-
(i) removed or dismissed from service; or
(ii) retrenched or has resigned from service, or became unemployed due to closure of the establishment, the wages payable to him shall be paid within two working days of his removal, dismissal, retrenchment or, as the case may be, his resignation.
(3) Notwithstanding anything contained in sub-section (1) or sub-section (2), the appropriate Government may, provide any other time limit for payment of wages where it considers reasonable having regard to the circumstances under which the wages are to be paid.
(4) Nothing contained in sub-section (1) or sub-section (2) shall affect any time limit for payment of wages provided in any other law for the time being in force.
Final Wages When Employment Ends
Section 17(2) requires wages payable to an employee to be paid within two working days where the employee is removed or dismissed, retrenched, resigns, or becomes unemployed because the establishment closes. This is a specific final-payment rule and is distinct from the ordinary daily, weekly, fortnightly or monthly payment schedule.
Power of the Appropriate Government
Section 17(3) begins with a non-obstante clause. It permits the "appropriate Government" to provide another time limit for payment where it considers that reasonable having regard to the circumstances in which wages are to be paid. Under Section 2 of the Code, the appropriate Government may be the Central Government or the State Government depending on the establishment concerned.
Effect of Other Laws
Section 17(4) preserves a time limit for payment of wages provided by another law for the time being in force. Employers should therefore examine the Code together with applicable rules, notifications and any other governing law that prescribes a payment deadline.
Practical Compliance Summary
Employers should clearly identify the wage period applicable to each establishment or category of employees, ensure that it never exceeds one month, configure payroll so that the Section 17 deadline is met, and have a process for prompt payment of final wages when employment ends. Records should also reflect the applicable wage period and payment date.