Code on Wages, 2019

Aug 12, 2019 | by Avantis RegTech Legal Research Team

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Labour Compliance

The Legislative Department on August 08, 2019 has published the Code on Wages, 2019. It extends to the whole of India and it will come into force on such date as the Central Government may, by notification in the Official Gazette appoint; and different dates may be appointed for different provisions of this Code and any reference in any such provision to the commencement of this Code will be construed as a reference to the coming into force of that provision.

The objective of the code of wages is to widen the scope to ensure equity and ease of compliance of labour laws. Further the endeavour is to remove multiplicity of definitions and authorities without compromising on the basic concepts of welfare and benefits to workers and to bring transparency and accountability into the system.

The Code amend and consolidate the laws relating to wages and bonus and matters connected therewith or incidental thereto, namely:

a)      Payment of Wages Act of 1936;

b)      Minimum Wages Act of 1948;

c)       Payment of Bonus Act of 1965; and

d)      Equal Remuneration Act of 1976

into a single code and provides for a national minimum wages for all workers.

The salient features of the Code are as following:

Ø  The Code on Wage universalizes the provisions of minimum wages and timely payment of wages to all employees irrespective of the sector and wage ceiling. This would ensure "Right to Sustenance" for every worker and intends to increase the legislative protection of minimum wage from existing about 40% to 100% workforce. Introduction of statutory Floor Wage to be computed based on minimum living conditions, will extend qualitative living conditions across the country to about 50 crore workers. It is envisaged that the states to notify payment of wages to the workers through digital mode.

Ø  The definition has been simplified and is expected to reduce litigation and will entail at lesser cost of compliance for an employer. An establishment will also be benefited as the number of registers, returns, forms etc., not only can be electronically filed and maintained, but it is envisaged that through rules, not more than one template will be prescribed.

Ø  Through Code on Wages, the methodology to fix the minimum wages has been simplified and rationalised by doing away with type of employment as one of the criteria for fixation of minimum wage.

Ø  Many changes have been introduced in the inspection regimes including web based randomised computerised inspection scheme, jurisdiction-free inspections, calling of information electronically for inspection, composition of fines etc. All these changes will be conducive for enforcement of labour laws with transparency and accountability.

Ø  To protect the interest of the workers, the limitation period has been raised to 3 years and made uniform for filing claims for minimum wages, bonus, equal remuneration etc.

[NO. 29 OF 2019]


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