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Code On Wages 2019

Wages plays an important role in the economy as it gives the power to the employees to spend more, this covers the wide aspect not only money but the basic necessities and also the money they use to buy product and services. Wages plays an important role in an individual's life as it maintains their living standards, for employers it attracts and keeps the employees. From the time being there was an urgent need to make certain changes in the labour laws of the country which was need to be beneficial for the employers and the employees both.

Code on wages also known as wages code was passed in the year 2019, over these grounds pay, social security, industrial relations, and occupational safety and working conditions four labour codes have been highlighted in this code.

What Is The Code Of Wages:

This code consolidated the previous four laws related to labour matters of their wages and payments, the acts which were consolidated through the code of wages:
  • Payment of Wages Act, 1936,[1]
  • Minimum wages Act, 1948
  • Payment of bonus act, 1965 and
  • Equal Remuneration Act, 1976.
In the code of wages number of employees in an organization doesn't matter, both the organized and unorganized sector comes under it. However in an accounting year there have been a requirement of presence of 20 or more employees And also applies to all the employees irrespective of the ceiling on their wages.

What Is New In The Code Of Wages, 2019:

  • "Floor wages", the rates will be fixed by the central government taking care of the minimum living standard of a worker and after the enactment of this code the minimum wages fixed by the state government cannot be less than the floor wages.
  • The employer cannot deduct the wages except which are mentioned in the code.
  • Central government is advised by this code to revise the amount of minimum wages in every 5 years, beside DA.
  • Code prohibits the discrimination on the basis of wages, any kind of discrimination on the basis of gender during employment.
  • Payment of bonus has to be done by bank transfers and by cheques only.
  • It has scrapped the concept of scheduled employment.
  • This law made a system for the offences which were nor penalised earlier and now are punishable with fine.

Uniform Definition Of "Wages":

Countless hours have been spend on this definition by the courts and the lawyers for its interpretation, hence the major objective of this code was to consolidate the matters related to wages in one frame and the definition of wages is one of that, it introduced the new definition of "wages" that have been used in all the four laws.

We shall examine the new definition and their impact first: "wages" it includes all the remunerations paid to the employees, except certain fixed components like HRA, PF, BONOUS. In long run the uniformity in the definition of wages will bring clarity which the certain laws never provide, the new definition is not at all clear certain interpretation is still required.

Time Limit For Wages Under This Code:

The employers is liable to pay wages to the employee:
  • At the end of the shift to the daily worker.
  • For weekly worker on the last working day of the week.
  • For fortnight worker it will be on the second day at the end of fortnight.
  • In case of monthly wages with in the seven days of the next coming month.

Concept Of Equal Remuneration On Equal Work:

This code prohibits any kind of discrimination in the organization to the employees on the ground of wages, gender, in case of gender no discrimination can be done on the ground of employment except in some conditions if women is prohibited by law to work in it is considerable.

Here, now same work for work or work of similar nature means work where skills, experience, efforts and responsibility are same hence they are entitled for the equal wages.

What Are The New Legislative Reforms Under This Act?

Minimum wage floor is the newest reform, web based inspection is introduced this will save the time which was earlier required in physical inspection.

This code makes mandatory to all the establishments to make a register for record of new employees, wages, remuneration and bonus paid during the year hence, no need of multiple registers is required now.

What Will Be The Changes In Payroll Under This Code:

  • Increased contribution to the provident fund will be there.
  • Change in gratuity rules:
    earlier employees were able to have gratuity when they had completed 5 years in an establishment but now he can claim even after one year of his completion of job.
  •  Salary structure is also changed, even with 4 days working in a week.

The code of wages is a step in aright direction, and its implementation will be seen in courts, although the compliance cost might be there, and lots of paper work might be there but the new code is employee positive, with active regulations and with fare check of the central and state government.

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