New Delhi: Rajya Sabha on Wednesday passed the Payment of Wages Amendment Bill 2017 which allows employers to pay wages in non-cash mode without formal approval from workers, a day after the Lok Sabha passed it.

The bill will now be sent to the President for his assent.

This will benefit workers in terms of fair payments, bring more workers into formal employment and allow more workers to get social security benefits, labour minister Bandaru Dattatreya said in the Rajya Sabha during a debate over the bill in the house.

The change in law is part of the National Democratic Alliance (NDA) government’s ongoing drive to create a less-cash economy.

Under the Payment of Wages Act 1936, employers can use cheque or bank transfers to pay wages only with a written authorization from the employee. The amendment bill, once it becomes an Act, will allow employers to pay in cash, cheque or credit the amount directly to a bank account, even without a worker’s approval.

Before the Centre moved to make non-cash salary payment part of the Payment of Wages Act, states like Kerala, Punjab, Uttarakhand and Haryana have made changes to ensure wage payments through bank transfers and cheques over the last three years.

Once the bill becomes law, it will also repeal the Payment of Wages (Amendment) Ordinance 2016, which was promulgated on 28 December to effect cashless transactions as several industries like textiles and apparel had said their production had taken a hit due to cash crunch in the country. The ordinance, and now the bill, follow the demonetisation of Rs500 and Rs1,000 banknotes on 8 November.