Code on Wages 2019 May Be Implemented By September 2020

The Central Government is speculated to implement a new set of rules for Code on Wages 2019 by September 2020. The draft rules issued by the Union Ministry of Labour on July 7 is now included in the official gazette. 

The gazette is now open for public feedback for 45 days. If no issue arises, the new rules will be implemented. The Parliament approved the code in August 2019. About 50 crore workers are said to benefit from the new code. Several laws related to wages and bonus have been amended and included in the Code on Wages 2019.

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Once the new code is implemented, the four labour laws – Minimum Wages Act, Payment of Wages Act, Payment of Bonus Act, and Equal Remuneration Act – will be subsumed. In exchange, the following new rules can be seen in the code.

• Defining Labour: The Code on Wages has simplified and redefined the term ‘labour’. This is expected to reduce litigations and compliance cost for employers.

• Minimum Pay and Timely Payment Guaranteed: The code has set the provision for minimum wages and timely payment as applicable to all employees across sectors and wage ceiling. This rule seeks to address issues about delayed payment and endeavours to ensure that no sexual discrimination is done while paying wages.

• Working Hours: The draft rules state eight working hours a day is mandatory. Also, there is no change in working hours under the Factory Act. This clarifies the speculation of an increase in working hours due to the COVID-19 crisis.

• Floor Wage Calculation: The code mentions that the floor wage will be calculated based on minimum living conditions; this benefits over 50 crore employees across India. A central advisory may fix the floor-level minimum wages after considering the minimum living standard, such as food, clothing, housing, and other factors, as stated by the government.

For any clarifications/feedback on the topic, please contact the writer at apoorva.n@cleartax.in