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Parliament Passes Code On Wages For Workers [Read Bill]

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3 Aug 2019 3:58 AM GMT
Parliament Passes Code On Wages For Workers [Read Bill]
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The Rajya Sabha on Friday passed the Code on Wages, 2019, which will subsume four existing laws on labour wages - the Payment of Wages Act, 1936; the Minimum Wages Act, 1948; the Payment of Bonus Act, 1965, and the Equal Remuneration Act, 1976.

Lok Sabha had cleared the Bill on July 30.

As per the Code, the central government can fix floor wages, taking into account living standards of workers, based on the advice of the Central Advisory Board and concerned state governments. It can set different floor wages for different geographical areas.

A tripartite committee comprising representatives of trade unions, employers and state government would fix a floor wage for workers throughout the country, said Union Labour Minister Santosh Kumar Gangwar in the House.

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.minimum rate of wages fixed or revised by the appropriate Government

The minimum wages fixed or revised by the government consists of––

(a) a basic rate of wages and an allowance at a rate to be adjusted, at such intervals and in such manner as the appropriate Government may direct, to accord as nearly as practicable with the variation in the cost of living index number applicable to such workers (hereinafter referred to as "cost of living allowance"); or

(b) a basic rate of wages with or without the cost of living allowance, and the cash value of the concessions in respect of supplies of essential commodities at concession rates, where so authorised; or

(c) an all-inclusive rate allowing for the basic rate, the cost of living allowance and the cash value of the concessions, if any .

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.

The Code prohibits employers from paying wages less than the minimum wages. Minimum wages will be notified by the central or state governments.

No gender discrimination

Clause 3 of the bill prohibits discrimination in payment on ground of gender

Work hours

Where the minimum rates of wages have been fixed under this Code, the appropriate Government may —

(a) fix the number of hours of work which shall constitute a normal working day inclusive of one or more specified intervals;

(b) provide for a day of rest in every period of seven days which shall be allowed to all employees or to any specified class of employees and for the payment of remuneration in respect of such days of rest;

(c) provide for payment for work on a day of rest at a rate not less than the overtime rate.


Chapter IV of the Bill contains provisions dealing with payment of bonus.

The Code prohibits 'contracting out', which means that any contract or agreement whereby an employee relinquishes the right to any amount or the right to bonus due to him under this Code shall be null and void.

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