Section 19 of the Code on Wages, 2019: Fines

Section 19 regulates when an employer may impose a fine on an employee, the maximum amount of the fine, procedural safeguards, the time for recovery and the records that must be maintained.

Updated: 16 September 2026

Current legal position: Section 19 is in force. The Central Government brought sections 1 to 41 of the Code on Wages, 2019 into force with effect from 21 November 2025. For establishments for which the Central Government is the appropriate Government, the Code on Wages (Central) Rules, 2026 prescribe the approval, notice, show-cause and record-keeping procedure discussed below.

Meaning and scope of Section 19

A fine is a monetary penalty imposed by an employer for an approved act or omission of an employee. Section 19 does not permit an employer to impose fines at will. The misconduct or omission must fall within the acts and omissions approved by the appropriate Government or prescribed authority, the employee must receive an opportunity to show cause, and the statutory monetary and time limits must be observed.

Maximum fineNot more than 3% of the wages payable to the employee for that wage-period.

Minimum ageNo fine may be imposed on an employee under 15 years of age.

Recovery periodThe fine cannot be recovered by instalments or after 90 days from the date it was imposed.

Opportunity to replyThe employee must be given an opportunity to show cause before a fine is imposed.

Section 19 - statutory provisions explained

Section 19(1): Approved acts and omissions. A fine can be imposed only for an act or omission specified by the employer with the previous approval of the appropriate Government or the prescribed authority.

Section 19(2): Notice at the workplace. The approved acts and omissions must be displayed in the prescribed manner at the premises where the employment is carried on.

Section 19(3): Show-cause opportunity. A fine cannot be imposed until the employee has been given an opportunity to show cause and the prescribed procedure has been followed.

Section 19(4): Three per cent ceiling. The total fine imposed in any one wage-period cannot exceed 3% of the wages payable to the employee for that wage-period.

Section 19(5): Employee below 15 years. No fine may be imposed on an employee who is under 15 years of age.

Section 19(6): Recovery restrictions. A fine cannot be recovered in instalments and cannot be recovered after 90 days from the day on which it was imposed.

Section 19(7): Date of imposition. The fine is deemed to have been imposed on the day of the act or omission for which it was imposed.

Section 19(8): Register and use of realisations. Fines and recoveries must be recorded in the prescribed register. Amounts realised as fines may be used only for approved purposes beneficial to persons employed in the establishment.

Procedure under the Code on Wages (Central) Rules, 2026

Where the Central Government is the appropriate Government, Rules 14 to 16 provide the operative procedure for Section 19:

Approval authority: the Deputy Chief Labour Commissioner (Central) having jurisdiction over the employee's place of work is the authority for approving acts and omissions for Section 19(1).
Display of notice: the notice of approved acts and omissions must be displayed physically or electronically at a conspicuous place in Hindi, English and the local language. A copy must also be sent electronically or by speed post to the jurisdictional Inspector-cum-Facilitator.
Show-cause notice: before imposing a fine, the employer must intimate the employee electronically or in writing, specifying the relevant act or omission and allowing seven days to show cause.
Decision: if the charge is established, the fine may be imposed. If no reply is received within the prescribed period, the fine may be imposed and must be intimated to the employee within 15 days of its imposition.

Register of fines and records

Rule 51 of the Central Rules requires covered employers to maintain prescribed registers electronically or in physical form. Fines and realisations under Section 19(8) are recorded in Form IV - Register of Wages, Overtime, Advances, Fines and Deductions for Damage and Loss. The Central Rules also require the registers to be preserved for five years after the date of the last entry.

Practical compliance checklist

Before recovering a fine from wages, an employer should verify that the act or omission is duly approved and notified, the employee has received the required opportunity to respond, the fine stays within the 3% wage-period ceiling, the employee is at least 15 years old, recovery occurs within the statutory period and the transaction is entered in the prescribed register. Section 18 should also be read with Section 19 because fines are one of the deductions that may lawfully be made from wages subject to the Code.

Official legal resources

For the authoritative text and current rules, refer to the Code on Wages, 2019 on India Code, the 21 November 2025 commencement notification, and the e-Gazette of India for notifications and the Code on Wages (Central) Rules, 2026.

Note: The Central Rules apply where the Central Government is the appropriate Government. State rules and notifications should be checked where the State Government is the appropriate Government.