Code of Wages 2019 Notified


Ajit Kumar AJIT KUMARWISDOM IAS, New Delhi.

 
                                      Code of Wages 2019 Notified
 
The Code on Wages 2019, which paves the way for the introduction of mandatory minimum wages at the national level for 50 crore workers, has become a reality now.

The Government has notified the Code after it received assent from the President of India on August 8.

The Lok Sabha on July 30 had cleared The Code on Wages Bill, 2019, followed by the Rajya Sabha’s nod on August 2. 2019
 
The Bill enables the Government to introduce the minimum wages for workers besides addressing issues such as delay in payment of wages to employees.

The Bill was earlier introduced in Lok Sabha in August 2017, and was referred to the Parliamentary Standing Committee, which submitted its report in December 2018.

However, owing to dissolution of 16th Lok Sabha, the Bill had lapsed. Therefore, a fresh Bill was drafted after considering the recommendations of the Parliamentary Standing Committee and other suggestions of the stakeholder.
 
The Code has subsumed four labour laws -- Minimum Wages Act, Payment of Wages Act, Payment of Bonus Act and Equal Remuneration Act. After the enactment of the Code, all the four Acts stand repealed.
 
According to the new law, a tripartite committee comprising representatives of trade unions, employers and the state government would fix floor wages for workers throughout the country.
 
It would also ensure that there is no discrimination between men and women as well as transgenders in getting wages.
 
The Code of Wages 2019
 
The Code seeks to universalise the provisions of minimum wages and timely payment of wages to all employees irrespective of the sector and wage ceiling.

The provisions of both the Minimum Wages Act and the Payment of Wages Act used to apply on workers below a particular wage ceiling working in Scheduled Employments only.

There were 12 definitions of wages in various labour laws, leading to litigation besides difficulty in its implementation. Under the Code, the definition has been simplified and is expected to reduce litigation and also reduce compliance cost for employers.
 
         
Key provisions of the Code on Wages Bill, 2019
 
1. 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.
 
2. Coverage: 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.
 
3. 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.
 
4. 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.   
 
(5) 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.
 
(6) Fixing the minimum wage: The Code prohibits employers from paying wages less than the minimum wages.  Minimum wages will be notified by the central or state governments.  This will be based on time, or number of pieces produced.  The minimum wages will be revised and reviewed by the central or state governments at an interval of not more than five years.  While fixing minimum wages, the central or state governments may take into account factors such as: (i) skill of workers, and (ii) difficulty of work. 
 
(7) Overtime: 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.   
 
(8) Payment of wages: Wages will be paid in (i) coins, (ii) currency notes, (iii) by cheque, (iv) by crediting to the bank account, or (v) through electronic mode.  The wage period will be fixed by the employer as either: (i) daily, (ii) weekly, (iii) fortnightly, or (iv) monthly.
 
(9) Deductions: Under the Code, an employee’s wages may be deducted on certain grounds including: (i) fines, (ii) absence from duty, (iii) accommodation given by the employer, or (iv) recovery of advances given to the employee, among others.  These deductions should not exceed 50% of the employee’s total wage.
 
(10) Determination of bonus: All employees whose wages do not exceed a specific monthly amount, notified by the central or state 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.
 
(11) Gender discrimination: The Code prohibits gender discrimination in matters related to wages and recruitment of employees for the same work or work of similar nature.  Work of similar nature is defined as work for which the skill, effort, experience, and responsibility required are the same.  
 
(12) Advisory boards: The central and state governments will constitute advisory boards.  The Central Advisory Board will consist of: (i) employers, (ii) employees (in equal number as employers), (iii) independent persons, and (iv) five representatives of state governments.  State Advisory Boards will consist of employers, employees, and independent persons.  Further, one-third of the total members on both the central and state Boards will be women.  The Boards will advise the respective governments on various issues including: (i) fixation of minimum wages, and (ii) increasing employment opportunities for women.
 
(13) Offences: The Code specifies penalties for offences committed by an employer, such as (i) paying less than the due wages, or (ii) for contravening any provision of the Code.  Penalties vary depending on the nature of offence, with the maximum penalty being imprisonment for three months along with a fine of up to one lakh rupees. 
 




Saturday, 23rd Nov 2019, 08:18:43 AM

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