{"id":29946,"date":"2020-03-28T17:23:55","date_gmt":"2020-03-28T11:53:55","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=29946"},"modified":"2020-03-28T17:23:58","modified_gmt":"2020-03-28T11:53:58","slug":"a-review-of-the-code-on-wages-2019","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/a-review-of-the-code-on-wages-2019\/","title":{"rendered":"A Review of the Code on Wages, 2019"},"content":{"rendered":"

In India, labour laws<\/strong> have been governed by various legislations in the past at the central and state level. In order to integrate and harmonise the legislations concerning wages, the Ministry of Labour and Employment introduced the Code on Wages Act<\/a> in Lok Sabha on July 23, 2019<\/strong>. It was passed in both Houses of the Parliament. <\/p>\n\n\n\n

Overview<\/h2>\n\n\n\n

The\ncode intends to bring uniformity to the provisions of the minimum wages and timely\npayment of wages to all the employees regardless of the sector and wage\nceiling. The code is first among the four labour codes that have now become an\nAct. It has replaced or substituted four labour regulations, namely:<\/p>\n\n\n\n

  1. Payment of Wages Act, 1936<\/li>
  2. The Minimum Wages Act,\n1948<\/li>
  3. The Payment of Bonus Act,\n1965<\/li>
  4. The Equal Remuneration\nAct, 1976<\/li><\/ol>\n\n\n\n

    The\nindustries must understand the important aspects that the code offers. Under\nthis code, many definitions have been simplified, unlike the earlier legislations\nwhere implementation was difficult. The\napplicability of the regulations of the code applies to both organised and\nunorganised sectors<\/strong>. Let us now discuss the key highlights of the Code on\nWages, 2019.<\/p>\n\n\n\n

    Definition of Wages under Code on Wages, 2019<\/h2>\n\n\n\n

    The\ncode seeks to have a uniform definition of wages across all legislations,\nthereby minimising litigations.  The\ndefinition of Wages has been unified. The definition of Wages includes basic\npay, dearness allowance, retaining allowance. It excludes components like\novertime allowance, statutory bonus, employer contribution to provident\nfund\/pension, conveyance allowance\/travelling concession, retrenchment\nconcession, gratuity etc.<\/p>\n\n\n\n

    These exclusions may not exceed 50% of all remuneration<\/em> and in case it exceeds, such excess amount shall be deemed as remuneration and will be considered as wages.<\/p>\n\n\n\n

    Expansion of the definition of Employee under Code on\nWages, 2019<\/h2>\n\n\n\n

    The\ncode defines that any person who is an employee under wages and who works for\nan establishment whether skilled, semi-skilled, unskilled, manual, operational,\nsupervisory, administrative, managerial, technical or clerical work will be\nconsidered as an employee. All workers, other than members of the armed forces,\nwill be considered as an employee.<\/p>\n\n\n\n

    The Code of Wages, 2019<\/strong> provides the definition of the employee covering all categories including supervisory, managerial and administrative. It extends legislative protection to all the employees. The code has expanded the definition of the employee as well as the employer. It has resulted in broad-based applicability of the regulations wherein the regulations are applicable to employees in both organised and unorganised sector. <\/p>\n\n\n\n

    Minimum Wages under Code on Wages 2019<\/h2>\n\n\n\n

    To improve the compliance of the\nlabour laws, the government made some notable decisions on fixation of the\nMinimum Wages<\/strong>. The Minimum wages shall be fixed, keeping in mind the temperature,\nhumidity and hazard level of the work and not just the skill category and\ngeographical location of workers. The central government shall set the national\nfloor rate for wages after determining the minimum living standards of workers\nacross geographical areas. Where the existing minimum wages are higher than the\nfloor wages, the same shall be retained. <\/p>\n\n\n\n

    The\nstate governments shall fix the minimum wages for their region, and it must not\nbe lower than the national floor rate for wages. The code proposes that there\nshall be a review\/ revision of the minimum wages at intervals, not exceeding five\nyears. Also, the rate of wages for overtime work must not be less than twice\nthe rate for normal wages.<\/p>\n\n\n\n

    \"Private-Limited-Company\"<\/a><\/figure>\n\n\n\n

    Equality in Remuneration of the Wages<\/h2>\n\n\n\n

    The\ncode prescribes equal remuneration of the wages. Under the provisions, no\ndiscrimination shall be permitted based on the gender of the employees for the\nsame work or work of a similar nature. Work of a similar nature means a work\nfor which the skill, effort, experience, and responsibility required is the\nsame. This is a bit broad provision than the earlier provision which mentioned\nno discrimination on the basis<\/a> of Men and Women. The disputes related to the\nwages discrimination shall be decided by the authority notified by the\nappropriate government. It also prohibits discrimination on the basis of gender\nduring recruitment. The wage code has taken a gender-neutral approach by\nprohibiting discrimination of gender in matters relating to the wages. <\/p>\n\n\n\n

    Payment of Bonus under Code on Wages 2019<\/h2>\n\n\n\n

    Alike the provisions in the Payment of Bonus Act, 1965, the chapter related to bonus payments under the code shall apply to only such establishments that employ at least 20 employees on any day in that accounting<\/a> year. All the employees whose wages do not exceed a specific monthly amount (to be notified by the central or the state government) shall be entitled to an annual bonus. The bonus shall be payable on higher of the minimum wage or the wage ceiling set by the appropriate government for the payment of Bonus. The minimum bonus prescribed under the code is 8.33 %<\/strong>, and the maximum payable bonus shall be 20 %. It may, however, be noted that the state governments may, through a notification, exempt employees of any establishment from the application of the said chapter relating to the payment of Bonus, having regard to overall benefits in any other profit-sharing scheme available in such establishments. In addition, if any employee has been dismissed on conviction of sexual harassment, such employee shall not be entitled to the payment of Bonus. <\/p>\n\n\n\n

    Payment of Wages under Code on Wages 2019<\/h2>\n\n\n\n

    The\ncode directs for provisions of payment of minimum wages and timely payment of\nthe wages in order to ensure the right to sustenance for every employee. The\nwages settlement period for the payment of monthly wages has been specified as\non the 7th<\/sup> of the succeeding month, against the 10th<\/sup> of\nthe succeeding month. If an employee has been removed, retrenched, dismissed,\nresigns or becomes unemployed due to closure of an establishment, then, in that\ncase, the wages must be paid within two working days. Specific timelines for\nresignation cases were not provided for in the earlier Act. The limitation\nperiod for filing claims for minimum wages, equal remuneration, bonus etc. by\nthe workers has been raised to 3 years as against the earlier varying period\nbetween 6 months to 2 years.<\/p>\n\n\n\n

    Under this Code on Wages 2019<\/strong> the employee’s wages can be deducted on the following grounds namely- fines, absence from duty, accommodation given by the employer, recovery of advances given to the employee. These deductions must not exceed 50 % of the total wage of the employee.<\/div>\n\n\n\n

    Provision of Income cum Facilitator<\/h2>\n\n\n\n

    The wage code provides for the\nappointment and lays down the responsibilities of the Inspector cum Facilitator<\/strong>. The appropriate\ngovernment shall appoint Inspectors cum facilitators who shall carry out\ninspections. They may advise employers and employees for better compliance. <\/p>\n\n\n\n

    The\nprinciple objective behind this is to remove the arbitrariness and malpractices\nin the inspection. An essential point to note is that the Inspector cum\nfacilitator must give an opportunity to the employer to comply with the\nprovisions of the code through written direction and must give the employer\ntime for compliance. If the employer complies with the provisions then the\nInspector cum Facilitator shall not initiate the prosecution proceedings. <\/p>\n\n\n\n

    The inspector has the authority to search seize or make copies of such register, a record of wages or notices in respect of an offence under the wage code and can bring the defects or abuses of law to the notice of the appropriate government.<\/p>\n\n\n\n

    Penalties under Code on Wages 2019<\/h2>\n\n\n\n

    The quantum of the penalties has been raised significantly under this code depending upon the nature of the offence. The highest punishment being imprisonment of three months and or fine of up to 1,00,000 Rs. <\/em><\/strong>Non-payment of the amount due to an employee under the code is punishable with a monetary fine. The code on wages criminalises repeat offences. When a similar offence is committed within five years of the commission of the first offence or subsequent offence, then imprisonment and higher fines may be imposed. The wage code also has the provision of compounding of offences for which imprisonment is not the penalty. <\/p>\n\n\n\n

    Conclusion<\/h3>\n\n\n\n

    The\nCode on Wages, 2019, has simplified the implementation of labour legislation\nwhich was otherwise a bit complex. This could be a progressive step towards\nlabour reforms. The code on wages intends to improve transparency and\naccountability in the implementation of its provisions. The employers must have\na close look at its provisions and understand its impact on their operations.  The wages code also benefits many employees\nwho are paid less than the minimum wages. It promises to improve the ease of\ndoing business in India.<\/p>\n\n\n\n

    Also, Read :<\/b> Industrial Relations Code Bill 2019: an overview<\/a><\/mark>.<\/p>\n","protected":false},"excerpt":{"rendered":"

    In India, labour laws have been governed by various legislations in the past at the central and state level. In order to integrate and harmonise the legislations concerning wages, the Ministry of Labour and Employment introduced the Code on Wages Act in Lok Sabha on July 23, 2019. It was passed in both Houses of […]<\/p>\n","protected":false},"author":35,"featured_media":30011,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[2438,1931],"tags":[],"acf":{"service_id":"0"},"yoast_head":"\nA Review of The Code on Wages 2019: An Analysis<\/title>\n<meta name=\"description\" content=\"The applicability of the regulations of the code applies to both organised and unorganised sectors. Let us now discuss the key highlights of the Code on Wages, 2019.\" \/>\n<meta name=\"robots\" content=\"index, follow\" \/>\n<meta name=\"googlebot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta name=\"bingbot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterslice.com\/learning\/a-review-of-the-code-on-wages-2019\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"A Review of The Code on Wages 2019: An Analysis\" \/>\n<meta property=\"og:description\" content=\"The applicability of the regulations of the code applies to both organised and unorganised sectors. Let us now discuss the key highlights of the Code on Wages, 2019.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/enterslice.com\/learning\/a-review-of-the-code-on-wages-2019\/\" \/>\n<meta property=\"og:site_name\" content=\"Enterslice\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/enterslice\" \/>\n<meta property=\"article:published_time\" content=\"2020-03-28T11:53:55+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2020-03-28T11:53:58+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/03\/A-Review-of-the-Code-on-Wages-2019.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"670\" \/>\n\t<meta property=\"og:image:height\" content=\"352\" \/>\n<meta name=\"twitter:card\" content=\"summary\" \/>\n<meta name=\"twitter:creator\" content=\"@enterslice\" \/>\n<meta name=\"twitter:site\" content=\"@enterslice\" \/>\n<!-- \/ Yoast SEO plugin. -->","authorName":"Ashish M. Shaji","authorImageUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/10\/04.jpg","authorDescription":"Ashish M. Shaji has done his graduation in law (BA. LLB) from CCS University. He has keen interests in doing extensive research and writing on legal subjects especially on corporate law. He is a creative thinker and has a great interest in exploring legal subjects.","postViews":564,"readingTime":5,"nextPost":{"id":29981,"slug":"itr-refund-know-about-the-easiest-way-to-calculate-and-claim-it"},"prevPost":{"id":29941,"slug":"non-disclosure-agreement-in-india-essential-features"},"featuredMediaUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/03\/A-Review-of-the-Code-on-Wages-2019.jpg","postTerms":"Legal","_links":{"self":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/29946"}],"collection":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/users\/35"}],"replies":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/comments?post=29946"}],"version-history":[{"count":0,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/29946\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media\/30011"}],"wp:attachment":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media?parent=29946"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/categories?post=29946"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/tags?post=29946"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}