The Code on Wages, 2019 was introduced in Lok Sabha by the Minister of Labour, Mr. Santosh Gangwar on July 23, 2019. The Code replaces the following four laws: (i) the Payment of Wages Act, 1936, (ii) the Minimum Wages Act, 1948, (iii) the Payment of Bonus Act, 1965, and (iv) the Equal Remuneration Act, 1976.
This Act may be called the Code on Wages 2019
It extends to whole of India.
Coverage: The provisions of the Code will apply to all employees.
Floor wage: According to the Code, the central government will fix a floor wage, taking into account 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.
The minimum wages decided by the central or state governments must be higher than the floor wage. In case the existing minimum wages fixed by the central or state governments are higher than the floor wage, they cannot reduce the minimum wages.
Fixation of Minimum Wages – The appropriate Government shall fix the minimum rate of wages payable to employees for time work or for piece work. The appropriate Government shall review or revise minimum rates of wages ordinarily at an interval not exceeding five years.
Mode of Payment- All wages shall be paid in current coin or currency notes or by cheque or by crediting the wages in the bank account of the employeeor by the electronic mode. The employer shall fix the wage period for employees either as daily or weekly or fortnightly or monthly.
Wage for Overtime Work- The central or state government may fix the number of hours that constitute a normal working day. 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.
Deductions- Under the Code, an employee’s wages may be deducted on certain grounds including (a) Deductions for absence from duty. (b) Deductions for damage or loss. (c) Deductions for services rendered. (d). Deductions for recovery of advances. (e) . Deductions for recovery of loans. These deductions should not exceed 50% of the employee’s total wage.
Determination of Bonus- All employees whose wages do not exceed a specific monthly amount, notified by the appropriate government, will be entitled to an annual bonus. The bonus will be at least: (i) 8.33% of his wages, or (ii) Rs 100, whichever is higher. In addition, the employer will distribute a part of the gross profits amongst the employees. This will be distributed in proportion to the annual wages of an employee. An employee can receive a maximum bonus of 20% of his annual wages.
Central Advisory Board – The Central Government shall constitute the CentralAdvisory Board which shall consist of persons to be nominated by the Central Government— (a) representing employers; (b) representing employees which shall be equal in number of the members (c) independent persons, not exceeding one-third of the total members of the Board; and (d) five representatives of such State Governments as may be nominated by the Central Government. One-third of the members shall be women and a member specified in clause (c) of the said sub-section shall be appointed by the Central Government as the Chairperson of the Board.
The Central Advisory Board shall from time to time advise the Central Government on reference of issues relating to–– (a) fixation or revision of minimum wages and other connected matters;(b) providing increasing employment opportunities for women;(c) the extent to which women may be employed in such establishments or employments as the Central Government may, by notification, specify in this behalf; and (d) any other matter relating to this Code, and on such advice, the Central Government may issue directions to the State Government as it deems fit inrespect of matters relating to issues referred to the Board.
State Advisory Board – The State Advisory Board and each of the committees and sub- committees thereof shall consist of persons–– (a) representingemployers; (b) representing employees which shall be equal in number of the members specified in clause (a); and (c) independent persons, not exceeding one-third of the total members of the Board or committee or sub-committee, as the case may be. One-third of the members shall be women and one among the members specified in clause (c) of the said sub-section shall be–– (a) appointed by the State Government as the Chairperson of the Board; (b) appointed by the State Advisory Board as the Chairperson of the committee or sub-committee, as the case may be.
The State Government shall constitute a State Advisory Board for advising the State Government— (a) in fixation or revision of minimum wages and other connected matters; (b) for the purpose of providing increasing employment opportunities for women; (c) with regard to the extent to which women may be employed in such establishments or employments as the State Government may, by notification, specify in this behalf; and (d) in any other matter relating to this Code, which the State Government may refer from time to time to the Board.
Prohibition of discrimination on ground of gender – There shall be no discrimination in an establishment or any unit thereof among employees onthe ground of gender in matters relating to wages by the same employer, in respect of the same work or work of a similar nature done by any employee.
No employer shall,— (i) for the purposes of complying with the provisions reduce the rate of wages of any employee; and
(ii) make any discrimination on the ground of sex while recruiting any employee for the same work or work of similar nature and in the conditions of employment, except where the employment of women in such work is prohibited or restricted by or under any law for the time being in force.
Penalties for offences – Penalties for offences such as pays to any employee less than the amount due to such employee under the provisions of this Code contravenes any other provision of this Code or any rule made or order made or issued there under
having been convicted of an offence is again found guilty of similar offence.
About the Author
