1.
Lets Talk
Compliance !!
Labour Code On Wages

2.
Labour Code on Wages
The Second National Commission on Labour, submitted its report in June
2002 and recommended that the existing set of labour laws should be
broadly amalgamated into the following groups, namely:––
(a) Industrial relations;
(b) Wages;
(c) Social security;
(d) Occupational Safety, Welfare & Working conditions.
In pursuance of the recommendations of the said Commission and the
deliberations made in the tripartite meeting comprising of the Government,
Employers’ and Industry representatives, it was decided to bring the
proposed legislation, namely, the Code on Wages, Code on Social Security,
Code on Occupational Safety, Health and Code of Industrial Relations. The
proposed Code on wages, 2017 intends to amalgamate, simplify and
rationalise the relevant provisions of the following four central labour
enactments relating to wages, namely:––
(a) The Payment of Wages Act, 1936;
(b) The Minimum Wages Act, 1948;
(c) The Payment of Bonus Act, 1965; and
(d) The Equal Remuneration Act, 1976.

3.
Labour Code on Wages
The matters dealt with under aforesaid four different legislations are now
clubbed into one code. The total number of sections put together is getting
reduced from 115 to 68.
Infact, initially the draft Wages Code Bill, 2015 was published on 19th March
2015. Later, on 9th August 2017, 2nd version of Wage Code Bill, 2017 was
introduced in Lok Sabha but it was not passed. Now, the above bill got
lapsed because of the dissolution of 16th Lok Sabha in May 2019. Hence,
New Union Cabinet in 17th Lok Sabha has approved the Wages Code Bill on
3rd July 2019 with certain amendments to improve the ease of doing
business and attract investment for spurring growth Government is planning
to pass the bill in the ongoing session of Parliament.
The draft & the approved Bill is yet to be published. However, just to recap,
some of the key features proposed in the Wage Code, 2017 are highlighted
hereunder;
• Contractor is included in the definition of ‘employer’. Thereby, it is
understood, the buck stops with the contractor for payment of minimum
wages, bonus, etc., for the persons engaged by him and the liability will
not pass on to the Principal employer.
• As per the Equal Remuneration Act, only the women employees can claim
equal wages against discrimination, if any. But, as per this Code, all
genders (Male or female or transgender) may claim equal wages in case
they perform the same and similar kind of job.

4.
Labour Code on Wages
• Currently, the Central Government declares National Floor Level
Minimum Wages which has no statutory force. Through this code, it has
been mandated.
• The employees employed in the position of Supervisory, Managerial &
Administrative capacities are not considered as employees as per the
existing Minimum Wages Act whereas, the code intents to include them
also.
• Currently, the payment of wages Act will not apply to a person who is
drawing monthly wages of more than Rs. 24000/- . Now, the ceiling is
removed in the Code.
• Wage Code provides power to both the Central and State Governments
for making Rules. If each State comes up with different sets of Rules,
again, the uniformity could be missing. If it is possible, the law makers
can think of common set of Rules like the one which is one available
under the Payment of Bonus Act.
• The purpose of introducing definition separately for ‘worker’ and
‘employee’ is not quite clear. Currently, only the Equal Remuneration Act
has the term ‘Worker’ mentioned.
• The wages shall be settled within 2 working days even for the employees
who resign from their service. The Employer may find it difficult in
implementing the same.

5.
Labour Code on Wages
My Perspective:
The minimum wages for various employments are getting revised upward
constantly. Employees drawing a monthly salary of up to Rs 24000/- have
now been brought under the scope of the Payment of Wages Act. The salary
ceiling for the eligibility for bonus has been revised to Rs 21000/- and for
calculation, it has been increased to Rs 7000/- ( or the applicable minimum
rates of wages whichever is higher ). These measures are surely benefitting
the working class and rightly so. The increase in the minimum wages;
increase in the number of persons coming in to the purview of the bonus Act
and increase in the ceiling for bonus calculation have all, in turn, increased
the financial burden of the employers. And, they have been silently stayed
put with all these measures. Surely, they will be happy if the process of
compliance is simplified; if the transactional burden is reduced; if the
ambiguities are cleared and the enforcement wing plays an enabler. Aren’t
they right in their expectations out of the long-awaited labour codes? While
the idea of making the existing four Acts into just one code – Labour Code on
Wages – is highly appreciable, mere consolidation may not be sufficient.
Fingers crossed !!!!!
Mathusoodhanan T
mathu@aparajitha.com

6.
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