The Ministry of Labour and Employment has recently introduced the Code on Wages, 2019 Bill (“Bill”) in the Lok Sabha to amend and consolidate the various laws relating to wages and bonus by proposing to amalgamate, simplify and rationalise the following central labour Acts:
1. Payment of Wages Act, 1936,
2. Minimum Wages Act, 1948,
3. Payment of Bonus Act, 1965 and
4. Equal Remuneration Act, 1976
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.
The Code on Wages, 2017, on similar lines, was introduced earlier and referred to the Department-related Parliamentary Standing Committee on Labour, which submitted its forty-third Report on 18th December, 2018. However, before the said Bill could be passed in the said House, it lapsed on dissolution of the Sixteenth Lok Sabha. Hence, the present Code on Wages, 2019 has been introduced.
Key Features of the Bill:
• All essential elements relating to wages, equal remuneration, its payment and are provided for ;
• 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;
• The Bill 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;
• 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.;
• 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;
• Provision for floor wage for different geographical areas is proposed 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, the appropriate Government may 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;
• The appropriate Government may also appoint one or more authorities to hear and decide the claims under the proposed legislation;
• for the Bill provides graded penalty for different types of contraventions;
• The Bill requires the Inspector-cum-Facilitator to 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;
• Offences which are not punishable with imprisonment may be compounded;
• If a claim is 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
For further details, please refer to the document hyperlinked below.