Parliament passes code on wages for workers



The Code on Wages Bill, 2019 aims to amend and consolidate the laws relating to wages, bonus and other matters was passed in the Rajya Sabha on 02nd august 2019; previously it was passed in Lok sabha, now it would forwarded for president assent to become act. The Bill will be benefiting about fifty crore workers across the country.

As law info the bill will subsume four labour laws namely Minimum Wages Act, 1948, Payment of Wages Act, 1936, Payment of Bonus Act, 1965 and Equal Remuneration Act, 1976 following its enactment; all these four Acts would be repealed.

The bill  provides solution for the problems such as delay in payment of wages whether on monthly, weekly or daily basis, also ensure that there should be no discriminations between male and female as well as transgender in getting wages and providing Universal provisions of minimum wages and timely payment of wages to all employees irrespective of the sector and wage ceiling,

As present there are twelve definitions of wages in the different Labour Laws leading to difficulty in its implementation and litigation but through this bill definition has been simplified and hopes to reduce litigation and also reduce compliance cost for employers.

Features of the code on wages bill, 2019

  • Extent: The Code will apply to all employees; central government will make wage-related decisions for employments such as railways, mines, and oil fields, among others where as State governments will make decisions for all other employments. Wages does not include bonus payable to employees or any travelling allowance, among others as it restricted to salary, allowance, or any other component expressed in monetary terms.
  • Fixing the minimum wage: The Code on wages prohibits employers from paying wages less than the minimum wages which will be notified by the central or state governments and will be depend on time, or number of pieces produced.  While fixing minimum wages, the central or state governments may take into account factors such as skill of workers, and difficulty of work.  
  • This minimum wages by notification will be revised and reviewed by the central or state governments.
  • Floor wage:  Taking into account living standards of workers the central government will fix a floor wage and may set different floor wages for different geographical areas.  Before fixing the floor wage, the central government may consult with state governments and obtain the advice of the Central Advisory Board the minimum wages decided by the central or state governments must be higher than the floor waged. 
  •  Forms of Payment of wages: Wages will be paid in coins, currency notes, by cheque, by crediting to the bank account, or through electronic mode.  The wage period will be fixed by the employer can be daily basis, weekly basis, fortnightly basis, or monthly basis.
  • Gender discrimination: The code on wages prohibits gender discrimination in matters related to wages and recruitment of employees for the work of similar nature which is defined as work where the skill, efforts, experience, and responsibility required are the same nature.
  • Advisory boards: The central and state governments will constitute advisory boards. 
  • Deductions: The Code provides an employee’s wages may be deducted on certain grounds which including fines, absence from duty, accommodation given by the employer, recovery of advances given to the employee. These deductions should not exceed fifty percent of the employee’s total wage.
  • Offences: The Code provides penalties for offences committed by an employer, such as paying less than the due wages, for contravening any provision of the Code which may vary and the maximum penalty being imprisonment for three months which includes a fine of up to one lakh rupees. 


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