The Code on Wages 2019 Bill has been passed by the parliament and has received presidential assent. It has been published in the Gazette on 8th August, 2019. The Code subsumes four existing laws on labour wages – the Payment of Wages Act, 1936; the Minimum Wages Act, 1948; the Payment of Bonus Act, 1965, and the Equal Remuneration Act, 1976.
The Code allows the Centre to set a minimum statutory wage, a move expected to benefit 500 million workers across the country. It ensures minimum wages along with timely payment of wages to all employees and workers. Many unorganised sector workers like agricultural workers, painters, persons working in restaurants and Dhabas and Chowkidars, who were outside the ambit of minimum wages, will get legislative protection of minimum wages.
Key provisions of the Code on Wages Bill, 2019
- The Code will apply to all employees. The central government will make wage-related decisions for employments such as railways, mines, and oil fields, among others. State governments will make decisions for all other employments.
- According to the Code, the central government will fix a floor wage, taking into account the living standards of workers. Further, it may set different floor wages for different geographical areas. Before fixing the floor wage, the central government may obtain the advice of the Central Advisory Board and may consult with state governments. As per the code the minimum wages decided by the central or state governments must be higher than the floor wage.
- The definition of wage under this code has been simplified. Wages include salary, allowance, or any other component expressed in monetary terms. This does not include bonus payable to employees or any travelling allowance, among others.
- The number of hours that constitute a normal working day may be fixed by the Central or State government. In case employees work in excess of a normal working day, they will be entitled to overtime wage, which must be at least twice the normal rate of wages.
- The bill ensures that employees getting a monthly salary are paid by 7th of the following month. Those working on a weekly basis will be paid on the last day of the week and daily wagers should get wages on the same day.
- Clause 3 of the bill prohibits discrimination in payment on ground of gender.
- Chapter IV of the Bill contains provisions dealing with payment of bonus. The Code prohibits ‘contracting out’, which means that any contract or agreement whereby an employee relinquishes the right to any amount or the right to bonus due to him under this Code shall be null and void.
- The period of limitation for filing of claims by a worker has been enhanced to three years and made uniform for filing claims for minimum wages, bonus, equal remuneration etc.
- In order to remove the arbitrariness and malpractices in inspection, the appropriate Government may appoint Inspectors-cum-Facilitators in the place of Inspectors, who would supply information and advice the employers and workers.
The Code shall come into force on such date as the Central Government may, by notification in the Official Gazette appoint.
Click here to read the Notification.
