Brief analysis of Code on Wages, 2019

The Code on Wages, 2019 as published in the Gazette on 8th August 2019, subsumes four main
Labour law acts. The Minimum wages Act, Payment of Wages Act, Equal Remuneration Act
and Payment of Bonus Act were earlier prevalent and governed the labour laws for workers
and employees in different manner. Post introduction of the Code on Wages, these acts have
been unified into one main code that shall regulate the labour laws on wages.
The main changes brought through this unifying Code are as follows:
 The Code generalizes the definition of Wages [u/s 2(y)]. Prior to code there were many
definitions, separately defined under various laws. [Payment of Bonus Act u/s 2(y),
Payment of Wages Act u/s 2(vi), Minimum Wages Act u/s 2(h)]

 It covers timely payment of wages and minimum wages for all the employees (in
organised as well as unorganised sector) [u/s 17] unlike minimum wages act [u/s 6& 17]
and payment of wages act [u/s 3& 5] which applied on workers below a particular wage
ceiling working in Schedule of Employments only.

 Central government to make wage related decisions for employment sectors such as
railways, mines and oil fields etc. and the State government for all other employments.
[u/s 2(d)]

 As per the Code, the Central Government will fix a floor wage based on living standards
of workers. Such floor wage may differ as per geographical regions in the country
[u/s 9]

 The central and state government must make sure that the minimum wages are not less
than the national floor wage. In case, where the minimum wage is higher than the set
floor wage, the prior cannot be reduced to the latter. [u/s 9(2)]

 The code ensures that employees getting monthly salary shall get the salary by 7th day
of next month and for those working on weekly basis shall get salary on last day of the
week and the daily wagers to get it on the same day [u/s 17]

 Under the definition of employer, contractors are also included [u/s 2(l)]. The liability
of Principal Employer diminishes here as the same cannot be escaped by the contractor.
[This was not there in minimum wages act]

 The minimum wages to be revised every five years. [u/s 8(4)]

 Overtime wage must be at least twice the standard rate of wages. [u/s 14]

 Prohibition of gender discrimination [u/s 3(2)(ii)] in matters relating to wages and

recruitment of employees for same work or work of similar nature. [In the equal
remuneration act u/s 5, discrimination was barred while recruiting men and women
 workers]. The code prohibits gender discrimination for all genders and not just between
men and women.

 The code introduces web based randomised computerised inspection scheme,

jurisdiction free inspections, calling of information electronically for inspection. [u/s 51]

 Uniform filing for claims against minimum wages, bonus, equal remuneration has been
made as opposed to the previous periods which varied from 6 months to 2 years. The
limitation period for raising claims by the workers has been extended to 3 years.
[u/s 45(6)]

 The code includes employees employed in supervisory, managerial & administrative

positions under the definition of employees. [u/s 2(k)]

 The penalties vary depending upon nature of offence. Maximum being imprisonment
for three months along with fine up to rupees 1 lakh. [u/s 54(b)]