SET:LL:Code on Wages(2019) [announced on 22.11.2025]:notes prepared on 28112025
Topic : Code on Wages (for G S
Papers) {Prepared on 28 .11.2025 }
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TOPIC : Code on Wages: for UPSC(CSE)(Prelims) Exams. ,2026
QUESTIONS & ANSWERS
Question: The Code on Wages, 2019 seeks to simplify, consolidate, and rationalize which of the provisions of four existing central laws?
a)The Payment of Wages Act, 1936;
b) The Minimum Wages Act, 1948;
c)The Payment of Bonus Act, 1965; and The Equal Remuneration Act, 1976
d)All the above
Ans : d
Question: The code of Wages , 2019 aims at what ?
Ans : It aims to strengthen workers’ rights while promoting simplicity and uniformity in wage-related compliance for employers.
Question: What is Universal Minimum Wages?
Ans : The code establishes a statutory right to minimum wages for all employees across both organised and unorganised sectors. Earlier, the Minimum Wages Act applied only to scheduled employment covering about 30% of workers in India .
Question: What is introduction of floor wage ?
Ans : A statutory floor wage shall be set by the Government based on minimum living standards, with scope for regional variation. No state can fix minimum wages below this level, ensuring uniformity and adequacy nationwide.
Question: What is the criteria for wage fixation ?
Ans :Appropriate Governments will determine minimum wages considering workers’ skill levels (unskilled, skilled, semi-skilled and highly skilled) , geographic areas, and job conditions such as temperature, humidity or hazardous environments.
Question: What is gender equality employment ?
Ans : Employers shall not discriminate on the basis of gender, including transgender identity, in recruitment, wages, and employment conditions for similar work.
Question: What is Universal coverage for wage payment ?
Ans : Provisions ensuring timely payment and preventing un-authorised deductions will apply to all employees, irrespective of wage limits (currently applicable only to employees earning up to Rs.24,000/- ,month .
Question: What is overtime compensation ?
Ans : Overtime Compensation: Employers must pay all employees overtime wages at least twice the normal rate for any work done beyond the regular working hours.
Question: What is the responsibility for Wage Payment ?
Ans : Employers, including companies, firms or associations, shall pay wages to employees employed by them. Failure to do so makes the proprietor/ entity liable for unpaid wages.
Question: What is the role of nspector-cum-Facilitator?
Ansn : The traditional role of “Inspector” is replaced with “Inspector-cum-Facilitator,” emphasizing guidance, awareness, and advisory roles alongside enforcement to improve compliance.
Question: What are the aspects about compounding of offenses ?
Ans : First-time, non-imprisonable offences can be compounded by paying a payment penalty. Repeat offences within five years, however , cannot be compounded.
Question: What the Code says about decriminalisation of offences ?
Ans : The Code replaces imprisonment for certain first-time offences with monetary fines (up to 50% of the maximum fine), making the framework less punitive and more compliance-oriented.
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Government of India remains committed to promoting equality and social justice through inclusive policies and programmes that uplift all sections of the society. The Ministry of Labour and Employment aims to enhance employment opportunities in a sustainable manner by providing decent working conditions and quality of life.
The second National Commission on Labour had recommended that the existing Labour Laws should be broadly grouped into four or five Labour Codes on functional basis. Consequently, the Code on Wages, 2019 is one of the four codes of the labour laws that has been enacted. The Code on Wages, 2019 is a step to advance equity and labour welfare while ensuring enterprise sustainability. It standardizes definitions of key terms and streamlines procedures, reducing ambiguity and ensuring faster, time bound justice for employers. The bigger aim of the labour reforms is to drive economic growth through generation of decent employment opportunities for all.
The Code on Wages, 2019, amalgamates 4 wages and payment related labour laws viz. The Payment of Wages Act, 1936, The Minimum Wages Act, 1948, The Payment of Bonus Act, 1965 and The Equal Remuneration Act, 1976. It strikes a balance between protecting the rights of workers and facilitating ease of compliance for employers. The Code introduces key reforms to streamline and strengthen labour regulation.
The Code safeguards employee interests through fair wages, social security, and protection against exploitation, ensuring dignity and stability at work. It supports women workers through equal pay and representation, fostering inclusive participation. By ensuring fair wages and social security for all workers, it drives productivity and labour welfare. Together, these measures strengthen economic growth, employment generation, and workplace equity.
The Labour Reforms simplify the registration and licensing framework by introducing the concept of a Single Registration, Single License, and Single Return, thereby reducing the overall compliance burden to improve employment.
The Code on Wages, 2019 has reduced the number of rules from 163 to 58, number of forms from 20 to 6 and number of registers from 24 to 2.
Universalisation of Minimum Wages?
Section 5 of the Code on Wages, 2019 establishes a statutory right to minimum wages for all employees, extending its coverage to every sector, both organised and unorganised. Earlier, the minimum wages applied only to scheduled employments, covering roughly 30% of the workforce.
Ensures minimum pay for every employee, irrespective of industry, category, or nature of employment
Provides a uniform legal safeguard nationwide, reducing wage disparity.
Benefits vulnerable groups like casual employee, daily wagers, and migrant labourers.
Promotes social justice and equity by narrowing wage gaps.
Enhances employee’ income security and living standards.
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Question : Which section is given Introduction of Floor Wages?
Section 9 read with Rule 11 of the Code introduces floor wages as a statutory provision. The baseline wages will be fixed by the Central government on the basis of minimum living standards of an employee including food, clothing etc. It will be revised at regular intervals. State governments must ensure their minimum wages are not lower than this floor level.
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Question: How to Fix minimum wages?
Ans : Minimum wage rates for timework, piece work for different wage period i.e. by hours, day or by month to be fixed by the appropriate Government. It will be based on the skill of employee, and/or geographical area and arduousness of work. The minimum rate of wages may consist of basis rate of wages and allowances. The government shall revise minimum rate of wages ordinarily at an interval not exceeding five years. ‘
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Question : What is the redefined wage ?
Ans : For the purpose of calculation of benefits and social security contributions, the redefined wage includes basic pay, dearness allowance and retaining allowance. In case allowances and contributions exceed over 50% (as may be notified by the Central Government) of the total payment, excess amount shall be added to the wage. The social security contributions and benefits (like PF, gratuity, maternity benefits and bonus) will be based on a larger and fairer portion of pay, resulting in higher future benefits.
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Question: Which section is Stating working hours ?
Ans : Section 13 read with Rule 6 of the Code limits normal working hours to prevent employees from being overworked without adequate compensation. The period of work shall not exceed 48 hours a week, if employee is working for less than 6 days a week. The period of work shall not exceed 12 hours in a day in cases where flexibility is provided. This includes intervals for rest. The remaining days of that week shall be a paid holiday for the employee.
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Question: For Ensuring payment of wages what are the provisions?
Ans : Under Section 43 of the Code, every employer shall pay wages to the employee employed by him. In cases of failure, the company or firm or association or any other person who is the proprietor of the establishment, in which the employee is employed, shall be responsible for such unpaid wages, reinforcing employer liability under the Code.
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Question: What are the provisions for Timely payment of wages? :
Ans : The provisions relating to timely payment of wages and un-authorized deductions from wages, which were earlier applicable only in respect of employees drawing wages upto to ₹24,000 per month, is now applicable to all employees irrespective of the wage ceiling. It protects both blue-collar and white-collar employee, bringing them under a uniform wage protection framework. The provision ensures fairness in wages as every employer, regardless of salary and designation, is covered equally under the law.
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Question: What is the Time limit for payment of wages ? In accordance with Section 17 of the Code on Wages, 2019, the employer shall pay or cause to be paid wages to all the employees, engaged on
Daily; then at shift end,
Weekly; before the weekly holiday,
Fortnightly; within two days, and
Monthly; within seven days of the next month.
On termination or resignation; wages must be paid within two working days.
This guarantees timely income, prevents financial distress, and ensures employee can meet essential needs.
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Question: What is the Proof of payment and employment ?
Ans : Under Section 50(3) read with Rule 34 of the Code on Wages, 2019 the employers shall provide wage slips, electronically or in physical form, on or before wage payment, ensuring transparency and reducing disputes. This provides a documentary proof of employment and compensation. It also extends as a protection to employees in both organised and unorganised sectors including daily wagers and contracts employees.
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Question: What are the provisions for Payment of annual bonus?
Payment of bonus is applicable to every employee, drawing wages not exceeding such amount as fixed by appropriate government, who has worked for at least 30 days in an accounting year. The annual bonus is paid minimum at the rate of eight and one-third % and maximum up to 20% of the wages earned by the employee. This promotes economic justice by profit sharing, boosts employee morale, loyalty and motivation.
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Question: What is the extension of limitation period ?
The Code on Wages, 2019 provides that period of limitation for filing of claims by an employee from the earlier duration of 6 months-2 years has been enhanced to a period of 3 years. This gives employees more time to gather evidence, seek support, and pursue justice effectively.
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Question: What are the Minimum time rate wages for piece work?
Ans : Under Section 12 of the Code of Wages, 2019, if an employee is employed on piece work where a minimum time rate (instead of a piece rate) is fixed, the employer must pay wages not less than this minimum time rate.
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Question: What are the Proworker provisions?
Ans :
Guarantees minimum wage for piece rate workers, preventing underpayment.
Ensures income stability for vulnerable and low-income workers, especially in sectors like manufacturing, textiles, and construction.
Upholds dignity of labour by valuing time and effort.
Promotes economic security and better living standards, especially for unorganised workforce.
Extends legal protection of minimum wage to all payment types.
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Question: Which Section of Code on Wages deals with Payment of overtime?
Ans : In accordance with Section 14 of Code on Wages, 2019 employers must pay overtime wages at a rate not less than twice the normal wages for any work performed beyond regular working hours.
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Question: What are the Proworker provisions?
Ans :
Ensures fair compensation of work done and discourages exploitation of workers
Protects employee’ right to rest by making overtime costlier for employers
Provides an additional income opportunity for employee
============================================ Question: For Ensuring payment of wages, what are the provisions in the Code on Wages ?
Ans :
Section 43 holds the employer directly accountable for payment of wages
Section 17 guarantees timely income, prevents financial distress, and ensures employee can meet essential needs.
Section 50(3) read with Rule 34 ensures proof of employment and payment that promotes transparency, prevents disputes, and empowers employees.
Payment of annual bonus ensures employees share in enterprise profits, boosts morale, and enhances consumption capacity.
Section 12 prevents wage manipulation, exploitation and unfair practices in piece-rate jobs
Reward for extra work recognises uplifts dignity of labour and enhances productivity.
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Question: What are the provisions on Decriminalisation and composition of offences ?
Ans : The Code introduces a provision for compounding first-time offences that are not punishable by an imprisonment. However, no offence of same nature shall be compounded, if it has been repeated within a period of five years.
Composition of offences :
Section 56 read with Rule 36 of the code replaces criminal penalties (like imprisonment) with civil penalties (like graded monetary fines) for first time offences punishable with fine only. It introduces a provision of compounding for offenses punishable (with fine only) by paying sum of fifty percent of the maximum fine. For employers, it ensures that wage laws benefit the employees directly. For employees, it creates a work environment that is not driven by fear.
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Question: What are the Growth conducive provisions of Code on Wages?
Ans :
Uniform definition of wages, worker, employee etc
Replaces “Inspector Raj” system with a transparent, tech-based inspection system
Introduces random, web-based inspections to prevent bias
Promotes a co-operative, compliance-oriented work environment benefiting all
Provides security to employers while protecting employees’ dues, promoting investment confidence.
Ensures faster and time-bound justice for employer by streamlining procedures
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Question: What is ‘One Nation: One Code on Wages’?
Ans : Section 2 read with Rule 31 of the Code consolidates four existing wage laws into one with a uniform definition of wages, worker, employee etc.
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Question: Who is the Inspector cum,facilitators ?
Ans : In accordance with Section 51 of Code on Wages, 2019, the term Inspector is replaced with Inspector-cum-Facilitator emphasizing a dual role that combines enforcement with guidance. The facilitator will provide information, raise awareness, and offer advice to employers and employees to promote better compliance and worker welfare.
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Question: Which Section gives Protection of Employer’s assets?
Ans : Section 64 of the Code safeguards any amount deposited with the appropriate Government by an employer to secure the due performance of a contract with that Government and any other amount due to such employer from that Government in respect of such contract shall not be liable to attachment under any decree or order of any court in respect of any debt or liability incurred by the employer other than any debt or liability incurred by the employer towards any employee employed in connection with the contract aforesaid.
==================================================Question: What are the Gender inclusive employment policies ?
Ans:
1)Prohibition of Gender Discrimination
Pursuant to Section 3 of Code on Wages, 2019, there shall be no discrimination on the basis of gender, including transgender identity, in matters of recruitment, wages, or employment conditions for the same or similar work performed by employees. Unfair wage disparities based on gender shall be removed and equal pay for equal work will be ensured.
2)Promotes workplace equality and enhances social and economic empowerment by giving all genders equal chance to earn, thereby uplifting families and communities.
Removes wage disparities and promotes fairness in employment and recruitment conditions
3)Women’s Representation on Advisory Boards
In order to ensure women’s voices in policy-making, leading to more inclusive and balanced employment policies, Section 42 of the Code provides that one-third members of the Central/State Advisory Boards shall be women. The boards shall advise on fixation or revision of minimum wages, providing increasing employment opportunities for women.
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Question: How Code on Wagers 2019 promotes fairness etc.?
Ans : The Code on Wages, 2019 promotes fairness, equity, and inclusivity in India’s labour market. By ensuring uniform wage standards and social security, it safeguards both workers’ rights and employers’ interests. Overall, it strengthens economic justice, encourages formalisation, and enhances the dignity of labour.
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Code of Wages, 2019
CHAPTER I
Introduction:
The Code on Wages, 2019, has been notified on 08 August 2019.
The provisions of the
Payment of Wages Act, 1936,
the Minimum Wages Act, 1948,
the Payment of Bonus Act, 1965 and the
Equal Remuneration Act, 1976, have been assimilated and subsumed in the Code.
The Code provides for universal minimum wage across employments in organized and unorganized sector.
The Code requires the Central Government to fix floor wage i.e. the least wage that must be paid and that the minimum rates of wages fixed by the appropriate Governments shall not be less than the floor wage.
The Code prohibits gender discrimination in matters related to wages and recruitment of employees for the same work or work of similar nature done by an employee.
Every employee, drawing wages not exceeding a monthly amount as notified by the Central or State Government, and having put in at least 30 days of work in an accounting year, will be entitled to an annual bonus at the rate of 8.33% of wages earned or Rs. 100, whichever is higher.
“Labour” as a subject is in the Concurrent List of the Constitution of India and under the Codes, the power to make rules is vested with the Central Government as well as the State Governments as appropriate Government.
The purpose of the Code is to –regulate wages and bonus payments in all employments –where any industry, trade, business, or manufacturing is carried out.
Further the Code aims to promote equity & labour welfare at the same time sustainability of enterprises, thereby catalyzing economic growth and creation of employment opportunities.
The Code has 67 Sections spread out in 9 Chapters & 26 definitions of constantly used terms.
Following the common legislative pattern the Chapter –I of the Wage Code deals with its nomenclature, applicability and date from which the legislature would come in to force.
There are 26 definitions starting from 2(a) to 2(z). Section 3 of the Act states that there shall be no gender-based discrimination and section 4 of the Act prescribed the authority to decide whether a work is of same or similar nature for the purpose of ascertaining gender based discrimination.
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Code of Wages, 2019
CHAPTER I
Preliminary
1. (1) This Act may be called the Code on Wages, 2019.
(2) It extends to the whole of India.
(3) It shall come into force on such date as the Central Government may, by notification in the Official Gazette appoint; and different dates may be appointed for different provisions of this Code and any reference in any such provision to the commencement of this Code shall be construed as a reference to the coming into force of that provision.
2. In this Code, unless the context otherwise requires,––
2 (a) "accounting year" means the year commencing on the 1st day of April ;
(b) "Advisory Board" means the Central Advisory Board or, as the case may be, the State Advisory Board, constituted under section 42;
(c) "agricultural income tax law" means any law for the time being in force relating to the levy of tax on agricultural income;
"Appropriate Government" Section 2(d) of the Act says that the appropriate Government in relation to an industry would be the concerned State Government except otherwise the enterprise is owned or controlled by the Central Government.
(e) "company" means a company as defined in clause (20) of section 2 of the Companies Act, 2013;
(f) "contractor", in relation to an establishment, means a person, who —
(i) undertakes to produce a given result for the establishment, other than a mere supply of goods or articles of manufacture to such establishment, through contract labour; or
(ii) supplies contract labour for any work of the establishment as mere human resource and includes a sub-contractor;
Section 2 (g) of the Act defines "contract labour" as a worker who is hired in connection with the work of an establishment directly or through a contractor and excludes a person who is regularly employed by the contractor for any activity of his establishment under an mutually accepted agreement/standard and gets periodical increment in the pay, social security coverage and other welfare benefits.
(h) "co-operative society" means a society registered or deemed to be registered under the Co-operative Societies Act, 1912, or any other law for the time being in force relating to co-operative societies in any State;
(i) "corporation" means any body corporate established by or under any Central Act, or State Act, but does not include a company or a co-operative society;
(j) "direct tax" means–– (i) any tax chargeable under the–– (A) Income-tax Act, 1961;
(B) Companies (Profits) Surtax Act, 1964; (C) Agricultural income tax law; and (ii) any other tax which, having regard to its nature or incidence, may be declared by the Central Government, by notification, to be a direct tax for the purposes of this Code
An "employee" within the meaning of section 2(k) refers to any person employed on wages by an establishment to do any work for hire or reward, whether the terms of employment be express or implied, and also includes a person declared to be an employee by the appropriate Government, but does not include any member of the Armed Forces of the Union but excludes an apprentice engaged under the Apprentices Act, 1961.
(l) "employer" means a person who employs, whether directly or through any person, or on his behalf or on behalf of any person, one or more employees in his establishment and where the establishment is carried on by any department of the Central Government or the State Government, the authority specified, by the head of such department, in this behalf or where no authority, is so specified the head of the department and in relation to an establishment carried on by a local authority, the chief executive of that authority, and includes,—
(i) in relation to an establishment which is a factory, the occupier of the factory as defined in clause (n) of section 2 of the Factories Act, 1948 and, where a person has been named as a manager of the factory under clause (f) of sub-section (1) of section 7 of the said Act, the person so named; (ii) in relation to any other establishment, the person who, or the authority which, has ultimate control over the affairs of the establishment and where the said affairs is entrusted to a manager or managing director, such manager or managing director; (iii) contractor; and (iv) legal representative of a deceased employer;
(m) "establishment" means any place where any industry, trade, business, manufacture or occupation is carried on and includes Government establishment;
An ‘employers’ in relation to the Wage Code means a person who employs one or more employees,
a. Directly,
b. Through any other person, or
c. On behalf of other person, as
i. An Occupier of a factor
ii. Authority of any Government
iii. Legal representative of a deceased employer;
(n) "factory" means a factory as defined in clause (m) of section 2 of the Factories Act, 1948;
p) "Income-tax Act" means the Income -tax Act, 1961;
(q) "industrial dispute" means,— (i) any dispute or difference between employers and employers, or between employers and workers or between workers and workers which is connected with the employment or non-employment or the terms of employment or with the conditions of labour, of any person; and (ii) any dispute or difference between an individual worker and an employer connected with, or arising out of, discharge, dismissal, retrenchment or termination of such worker;
(r) "Inspector-cum-Facilitator" means a person appointed by the appropriate Government under sub-section (1) of section 51;
(s) "minimum wage" means the wage fixed under section 6;
(t) "notification" means a notification published in the Gazette of India or in the Official Gazette of a State, as the case may be, and the expression "notify" with its grammatical variations and cognate expressions shall be construed accordingly;
(u) "prescribed" means prescribed by rules made by the appropriate Government;
"same work or work of a similar nature" under section 2(v) means
a. work in respect of which the skill, effort, experience and responsibility required are the same,
b. when performed under similar working conditions by employees and the difference if any, between the skill, effort, experience and responsibility required for employees of any gender, are not of practical importance in relation to the terms and conditions of employment;
(w) "State" includes a Union territory;
(x) "Tribunal" shall have the same meaning as assigned to it in clause (r) of section 2 of the Industrial Disputes Act, 1947;
According to Section 2(y) of the Wage Code ‘wages’ as means all remuneration whether by way of salaries, allowances or otherwise that could be expressed in terms of money be payable to a person employed in respect of his employment or of work done in such employment
The components of ‘wages’ are
(a) Basic Pay,
(b) Dearness Allowance and
(c) Retaining Allowance (if any).
All other amenities, incentives, bonus etc are excluded unless they exceed 50% of wage [a +b+c above]. Otherwise one-half, or the per cent, as may be notified shall be deemed as remuneration and shall be accordingly added in wages. Again if the employee receives remuneration in kind which does not exceed fifteen per cent of the total wages payable to him, the remuneration received in kind shall be considered while computing wage for the respective employee.
But while computing wage for the purpose of equal remuneration, the following shall be included
(d) any conveyance allowance or the value of any travelling concession; (f) house rent allowance; (g) remuneration payable under any award or settlement between the parties or order of a court or Tribunal; (h) any overtime allowance;
(z) "worker" means any person (except an apprentice as defined under clause (aa) of section 2 of the Apprentices Act, 1961) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied, and includes—
(i) working journalists as defined in clause (f) of section 2 of the Working Journalists and other Newspaper Employees (Conditions of Service) and Miscellaneous Provisions Act, 1955; and
(ii) sales promotion employees as defined in clause (d) of section 2 of the Sales Promotion Employees (Conditions of Service) Act, 1976, and for the purposes of any proceeding under this Code in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched or otherwise terminated in connection with, or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute, but does not include any such person––
(a) who is subject to the Air Force Act, 1950, or the Army Act, 1950, or the Navy Act, 1957; or (b) who is employed in the police service or as an officer or other employee of a prison; or (c) who is employed mainly in a managerial or administrative capacity; or (d) who is employed in a supervisory capacity drawing wage of exceeding fifteen thousand rupees per month or an amount as may be notified by the Central Government from time to time
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Discrimination :
3. (1) There shall be no discrimination in an establishment or any unit thereof among employees on the ground of gender in matters relating to wages by the same employer, in respect of the same work or work of a similar nature done by any employee.
(2) No employer shall,— (i) for the purposes of complying with the provisions of sub-section (1), reduce the rate of wages of any employee; and (ii) make any discrimination on the ground of sex while recruiting any employee for the same work or work of similar nature and in the conditions of employment, except where the employment of women in such work is prohibited or restricted by or under any law for the time being in force.
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Similar nature of work :
4. Where there is any dispute as to whether a work is of same or similar nature for the purposes of section 3, the dispute shall be decided by such authority as may be notified by the appropriate Government.
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CHAPTER II
MINIMUM WAGE [Section 5 to Section 14]
The major issues that dealt with under chapter are:
1. Payment of minimum rate of wages. The mandate of the Code is that Minimum Wage as notified by the Appropriate Government must be paid to the employees. a. Fixation of Minimum wages: Minimum wages shall be fixed by the appropriate Government shall fix the rates of minimum wage for both in terms of : either on a. Time work in terms of hour, day or month and Piece work. This shall be based on skill required or characteristics of the work.
2. Components of Minimum Wages: Any minimum rate of wages fixed or revised by the appropriate Government may consist of–– a. A basic rate of wages and an allowance, b. Cash value of the concessions c. An all-inclusive rate
3. Procedure for fixing and revising Minimum Wages: The appropriate Government shall constitute a committee three parties and independent persons for the purpose, and notify their recommendations inviting comments. After considering the responses the appropriate Government would fix the rates of minimum wage. In this course the appropriate government shall also consult the concerned Advisory Board constituted under section 42 of the Code.
4. Power of Central Government to fix floor wage. The National Floor Level Wage rate is the Central Government notified lowest rate of wage for the respective geographical area. The Central Government after taking into account minimum living standards of a worker with the advice of the ‘Central Advisory Board’ and after consulting with the State Governments shall fix the National Floor Level wage rate. The National Floor Level Wage Rate may be different for different geographical areas
5. Wages of employees who works for less than normal working day. Unless otherwise the employee is unwilling to perform work for the full day, even if the worker have actually worked less than the normal working hour, full daily wages as fixed by the appropriate government shall have to be paid by the employer to the worker concerned.
6. Wages for two or more classes of work. Daily wage shall be calculated on the basis of time respectively occupied in each such class of work. The total wage paid shall not be less than the minimum wage for the respective classes.
7. Minimum time rate wages for piece work where minimum piece rate is not available. The employer shall pay to such person wages at not less than the minimum time rate.
8. Fixing hours of work for normal working day. With the except in certain cases the appropriate government may fix the working hours of a normal day. While doing so, the appropriate government shall provide for weekly rest and overtime rates to be paid to the workers in case of work on the rest days.
9. Wages for overtime work. In the case of work beyond the normal daily working hour the employer shall pay him for every hour or for part of an hour so worked in excess, at the overtime rate which shall not be less than twice the normal rate of wages.
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CHAPTER III
PAYMENT OF WAGES [Section 15 to 25]
The chapter deals with :
1. Mode of payment of wages.
2. Fixation of wage period.
3. Time limit for payment of wages.
4. Deductions which may be made from wages. Especially on account of :
a. Fines.
b. Absence from duty.
c. Damage or loss.
d. Services rendered.
e. Recovery of advances.
f. Recovery of loans.
5. Chapter not to apply to Government establishments
MODE OF PAYMENT OF WAGES
Wage shall be paid in cash or by cheque or crediting the wages in the bank account of the employee or by the electronic mode.
Fixation of wage period: The wage period could be a day, week, fortnight or monthly but should not exceed a month. Time limit for payment of wages. Where the employees are engaged on: (i) Daily basis, at the end of the shift; (ii) Weekly basis, on the last working day of the week, that is to say, before the weekly holiday; (iii) Fortnightly basis, before the end of the second day after the end of the fortnight; (iv) Monthly basis, before the expiry of the seventh day of the succeeding month.
In case of sudden termination of work may be on account of retrenchment, dismissal etc, the wage should be paid within two working days from date of such retrenchment or dismissal
Deductions which may be made from wages. The Code prohibits any deduction from wages except the following:
a. Fines: Must be deducted from employees above 15 years of age and with proper notice showing act/omissions leading to fine and an opportunity to the employee to be heard. Fine shall not exceed 3% of the wage.
b. Absence from duty
c. Damage of goods/loss of money in his/her custody
d. Supply of goods/services by the employers
e. Recovery of loans and advances
. Interest on House/Building advance
g. Deduction of Income Tax
h. Contribution and deduction against advance from social security fund
i. Payment towards Employees CO-operative Society j
. Payment of membership fees to Trade Union with authorization
k. Contribution to Prime Ministers Relief Fund with authorization
l. Deduction by the Railway Authority on account of :
a. Acceptance of counterfeit coins/ notes
b. Failure to raise bill to collect fare/freight/ demurrage etc.
Total deductions shall not exceed fifty percent of wage
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CHAPTER IV
PAYMENT OF BONUS [Section 26 to 41]
The issues that are dealt under this chapter are:
1. Eligibility for bonus, etc.
2. Proportionate reduction in bonus in certain cases.
3. Disqualification for bonus.
4. Establishments to include departments, undertakings and branches.
5. Payment of bonus out of allocable surplus.
6. Computation of gross profits.
7. Computation of available surplus.
8. Sums deductible from gross profits.
9. Calculation of direct tax payable by employer.
10. Set on and set off of allocable surplus.
11. Adjustment of customary or interim bonus against bonus payable under this Code.
12. Deduction of certain amounts from bonus payable.
13. Time limit for payment of bonus.
14. Application of this Chapter to establishments in public sector in certain cases.
15. Non-applicability of this Chapter
Eligibility for bonus:
Every employee is eligible for bonus minimum 8.33% of wage or proportionate to allocable surplus if :
a. His/her wage is below the wage-ceiling prescribed by the appropriate government
b. Works at least thirty days in the establishment
c. The employer starts operations before five years or earns profit.
Proportionate reduction in bonus in certain cases: In case the employee has not worked on all the days during the year and bonus is more than the minimum bonus i.e. 8.33%, the bonus shall be reduced proportionate to his/her absence.
While calculating absence from duty absence for following grounds shall be excluded: a. Lay off b. Leave with salary/wages c. Temporary disablement d. Maternity
Disqualification for bonus: An employee shall not be eligible for bonus in case of termination from employment on the grounds of :
(a) Fraud; or (b) Riotous or violent behaviour while on the premises of the establishment; or (c) Theft, misappropriation or sabotage of any property of the establishment; or (d) Conviction for sexual harassment.
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ADVISORY BOARDS [Sections 42]
Both the Central as well as respective the State Governments have to constitute Advisory Boards with the representation from Employers, Employees, Government and independent persons with expertise one of them shall be chairperson of the Board. One third of the total members shall be women. The purpose of the Boards would be to advise regarding:
a. Fixation of Minimum Wage
b. Proving increased employment opportunities for women as well as to recommend to what extent to which women may be employed various operations and establishments.
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PAYMENTS OF DUES: Claims and Audit: [Section 43 to Section 50]
This chapter requires the employers to pay the dues to the employees as prescribed under this code. In case of failure of the employers the Firm/ or the proprietor of the establishment shall be responsible to pay. In the case of death of the employee, the nominee would receive the dues otherwise the dues to be deposited to prescribed organizations. The appropriate government shall appoint Authority and Appellate Authority for settling the claims. Claims could be raised by the employee, Trade Union or by Inspector cum Facilitator. In case of failure by the employer, claims could be recovered from the employers by the Collector as arrears of Land Revenue. In case of any dispute regarding the payment of Bonus, the dispute would be considered as Industrial Dispute. Accounts of the employers if audited by the C&AG or by Qualified Auditors shall be conclusive and the aggrieved party may appeal to the designated Appellate Authority.
INSPECTOR -CUM- FACILITATOR [Section 51]
Appropriate Government shall appoint ‘Inspector-cum- Facilitator’ to advise the employers regarding compliance as well as inspect establishments as may be assigned/ web based inspection schedule. The Inspector-Cum-Facilitator shall have powers to enter, inspect documents, seize documents etc
OFFENCES AND PENALTIES [Section 52 to section 56]
Courts not below the rank of Metropolitan/Judicial Magistrate of First Class shall try the cases under the code based on the complaints made the government/Authority/ employees/trade unions or Inspector-cum-facilitator. Appropriate Government may appoint an officer not below the rank of Joint Secretary to hold enquiry and impose penalty
Question: What are the components of minimum wage ?
Ans : Any minimum rate of wages fixed or revised by the appropriate Government may consist of–– a. A basic rate of wages and an allowance, b. Cash value of the concessions c. An all-inclusive rate
Offences and Penalty:
Offences by Companies:
Every person who, at the time the offence was committed was in charge of, and was responsible to the company for the conduct of business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly
Individual responsibility :
Any person fails to comply orders made by the designated officer shall be fined up to 20% of the respective maximum financial penalties in addition to the fine.
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MISCELLANEOUS [Sections 57 to section 69]
Highlights:
1. The chapter protects actions in accordance with the laid down procedure of the Code or taken on good faith.
2. The burden of proof lies on the employers. Further any contract agreement to do away with bonus shall be void.
3. The provisions of the code would prevail over any contravening law and judgments of the courts.
4. The appropriate Govt may delegate powers under this code to Officers.
5. If the employers proves that the offence committed by certain other person beyond his/her knowledge, shall be exempted,
6. Any property deposited by the employer to the appropriate govt shall attached primarily to discharge the liabilities of the employer towards the employees.
7. The provisions of the Code shall not apply to MGMREGA and Coal Mines Provident Fund and Miscellaneous Provisions Act, 1948, or of any scheme made there under.
8. Sections 65 to sections 69 deals with powers of the Central Government and Respective State Government., power to remove difficulties and Repeal and saving
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