Code On
Wage, 2019
Dr. Ganesh Kumar Jha Date- 17.07.2021
Secretary to Labour
Commissioner, Bihar T ime- 11;00 AM- 12;00 PM
Why this code?
The Second National Commission on Labour, which
submitted its report in June, 2002, had
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) safety; and
(e) welfare and working conditions.
Introduction
First code passed by legislative;
The Code on Wages, 2019 was introduced in Lok Sabha by
the Minister of Labour, Mr. Santosh Gangwar on July 23,
2019 and received the assent of the President on the 8th
August, 2019.
Three other codes-
Code On Social Security, 2020
OSHW Code,2020
IR Code, 2020
Amalgamation of Four Previous Acts
Benefits
The amalgamation of the said laws will facilitate the
implementation and also remove the multiplicity of
definitions and authorities without compromising on the basic
concepts of welfare and benefits to workers.
The proposed legislation would bring the use of technology in
its enforcement.
All these measures would bring transparency and
accountability which would lead to more effective
enforcement.
Widening the scope of minimum wages to all workers would be
a big step for equity.
The facilitation for ease of compliance of labour laws will
promote in setting up of more enterprises thus catalyzing the
creation of employment opportunities.
Chapters and Sections
Total IX Chapters and 69 Sections;
Chapter-II; Minimum Wage
Chapter-III; Payment of Wage
Chapter-IV; Payment of Bonus
Chapter-VI; Payment of Dues, Claims and Audit.
Chapter-VII- Inspector-Cum-Facilitators
Chapter-VIII- Offences and Penalties
Salient Features of the Code on Wages, 2019.
it provides for all essential elements relating to wages, equal
remuneration, its payment and bonus;
the provisions relating to wages shall be applicable to all
employments covering both organised as well as un-organised
sectors;
the power to fix minimum wages continues to be vested in the
Central Government as well the State Government in their
respective sphere;
it enables the appropriate Government to determine the
factors by which the minimum wages shall be fixed for
different category of employees. The factors shall be
determined taking into account the skills required, the
arduousness of the work assigned, geographical location of
the workplace and other aspects which the appropriate
Government considers necessary;
Salient Features of the Code on Wages, 2019.
the provisions relating to timely payment of wages and
authorised deductions from wages, which are presently
applicable only in respect of employees drawing wages of
twenty four thousand rupees per month, shall be made
applicable to all employees irrespective of wage ceiling. The
appropriate Government may extend the coverage of such
provisions to the Government establishments also;
it provides that the wages to employees may also be paid by
cheque or through digital or electronic mode or by crediting
it in the bank account of the employee. However, the
appropriate Government may specify the industrial or other
establishment, where the wages are to be paid only by cheque
or through digital or electronic mode or by crediting the wages
in the bank account of the employee;
Salient Features of the Code on Wages, 2019.
it provides for floor wage for different geographical areas so as
to ensure that no State Government fixes the minimum wage
below the floor wage notified for that area by the Central
Government;
in order to remove the arbitrariness and malpractices in
inspection, it empowers the appropriate Government to appoint
Inspectors-cum-Facilitators in the place of Inspectors, who would
supply information and advice the employers and workers;
it empowers the appropriate Government to determine the
ceiling of wage limit for the purpose of eligibility of bonus and
calculation of bonus;
in the place of number of authorities at multiple levels, it
empowers the appropriate Government to appoint one or more
authorities to hear and decide the claims under the proposed
legislation;
Salient Features of the Code on Wages, 2019.
it enables the appropriate Government to establish an appellate
authority to hear appeals for speedy, cheaper and efficient
redressal of grievances and settlement of claims;
it provides that the Inspector-cum-Facilitator shall give an
opportunity to the employer before initiation of prosecution
proceedings in cases of contravention, so as to comply with the
provisions of the proposed legislation. However, in case of repetition
of the contravention within a period of five years such opportunity
shall not be provided;
it provides for the appointment of officers not below the rank of
Under Secretary to the Government of India or an officer of
equivalent level in the State Government to dispose of cases
punishable only with fine up to fifty thousand rupees, so as to
reduce the burden on subordinate judiciary;
it provides for compounding of those offences which are not
punishable with imprisonment;
Salient Features of the Code on Wages, 2019.
it provides that where a claim has been filed for non-payment
of remuneration or bonus or less payment of wages or bonus or
on account of making deduction not authorised by the
proposed legislation, the burden shall be on the employer to
prove that the said dues have been paid to the employee;
the period of limitation for filing of claims by a worker has
been enhanced to three years, as against the existing time
period varying from six months to two years, to provide a
worker more time to settle his claims.
Short title, extent and commencement
Act may be called the Code on Wages, 2019.
Extends to the whole of India.
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.
• State;
Appropriate Government in relation to any other
establishment, the State
[Sec 2(d)] Government;
• Central;
an establishment carried on by or under the authority of
the Central Government,
railways,
mines,
oil field,
major ports,
air transport service,
telecommunication,
banking and insurance company or a corporation
a central public sector undertaking etc.
Employer [Sec 2(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;
Employee [Sec. 2(k)]
"employee" means, any person (other than an
apprentice engaged under the Apprentices Act,
1961), employed on wages by an establishment to do
any skilled, semi-skilled or unskilled, manual,
operational, supervisory, managerial,
administrative, technical or clerical 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
Worker [Sec (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.
• Any payment made in any heads (a) to (i) exceed 50% of total payment, shall be deemed as
wage/ Remuneration.
• For the purpose of equal wages to all genders and for the purpose of payment of wages, the
emoluments specified in clauses (d), (f), (g), (h) shall be taken for computation of wages.
• Explanation - The value of remuneration in KIND which does not exceed fifteen percentages
(15%) of the total wages payable to him shall be deemed to form part of the wages of such
employee.
Establishment [Sec. 2(m)]
"establishment" means any place where any
industry, trade, business, manufacture or
occupation is carried on and includes
Government establishment;
Same work or work of a similar nature
[Sec. 2(v)]
"same work or work of a similar nature" means
work in respect of which the skill, effort,
experience and responsibility required are the
same, 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;
Inspectors
appropriate Government may, by notification, appoint Inspector-cum-Facilitators for the purposes
of this Code who shall exercise the power;
Every Inspector-cum-Facilitator appointed shall be deemed to be public servant within the meaning
of section 21 of the Indian Penal Code.
The Inspector-cum-Facilitator may–– (a) advice to employers and workers relating to compliance
with the provisions of this Code; (b) inspect the establishments as assigned to him by the
appropriate Government, subject to the instructions or guidelines issued by the appropriate
Government from time to time.
Inspector-cum-Facilitator may,—
(a) examine any person who is found in any premises of the establishment, whom the Inspector-cum-
Facilitator has reasonable cause to believe, is a worker of the establishment;
(b) require any person to give any information, which is in his power to give with respect to the names and
addresses of the persons;
(c) search, seize or take copies of such register, record of wages or notices or portions thereof as the
Inspector-cum-Facilitator may consider relevant in respect of an offence under this Code and which the
Inspector-cum-Facilitator has reason to believe has been committed by the employer;
(d) bring to the notice of the appropriate Government defects or abuses not covered by any law for the
time being in force; and
(e) exercise such other powers as may be prescribe
