The Code on Wages, 2019: Highlights

The Code of Wages, 2019 was introduced by the Minister of Labour, Mr. Santosh Gangwar in the Lok Sabha in July 2019. The objective of the Bill is to regulate the wages of the employment areas related to industry, trade, business and manufacture and it covers all the employees. The wage related decision-making power has been divided between the central and the state governments.

The government will fix a floor wage according to living standards of the workers and different geographical locations and may do so after consulting the state governments and the Central Advisory Board. The minimum wages will be fixed higher than the floor wage by the central or state governments and will be revised at regular intervals. The Code requires the wages to not be less than the minimum wages set by the government. The Code also fixes the responsibility on the central and state governments to fix the hours of a normal working day and provide for an overtime wage in case the workers work beyond such normal working hours. The respective employees are free to fix the wage period as daily, weekly, fortnightly or monthly and the employees’ wages can be deducted in case of absence from duty, fines, accommodation given by the employer or recovery of advances given to the employer.

The Code prohibits gender discrimination in terms of disparity between the payment of wages and recruitment to the employees. It also states the constitution of advisory boards by the central and the state governments. The members of the Central Advisory Board will comprise of employers, employees, independent persons and five representatives of state governments and the members of State Advisory Boards will comprise of employees, employers and independent persons. One-third of the total members of central as well as the state boards will be women. The functions of the boards include advising the central and the state government on matters related to fixation of minimum wages and increasing employment opportunities for women. Certain penalties for offences committed by the employer like paying less than the due wages or violating any other provision have also been laid out in the Code.