The Code of Wages, 2019
- Key Objectives
- Establish a unified wage definition across all labour laws.
- Ensure timely and full payment of wages to all employees.
- Prevent exploitation through mandatory minimum wages.
- Promote gender equality in wages and job opportunities.
- Simplify compliance with a single set of rules and authorities.
- Uniform Definition of “Wages”
The Code provides one standard definition of wages. Wages include:
- Basic Pay
- Dearness Allowance (DA)
- Retaining Allowance
Exclusions (limited to 50% of total remuneration):
- HRA
- Bonus
- Overtime
- Conveyance
- Statutory allowances
- Employer PF/ESI contributions
If exclusions exceed 50%, the excess amount shall be added back to wages.
This ensures employers cannot artificially reduce the wage base.
- Floor Wage (New Concept)
- Central Government will fix national floor wages
- Based on living standards and geographical zones
No State can fix minimum wages below the floor wage.
- Minimum Wages
- Applicable to all employees.
- Fixed by State Governments based on industry, skill, and geography.
- To be revised at least every 5 years.
- Payment of Wages
- Daily wage: End of shift
- Weekly wage: Last working day of the week
- Monthly wage: Before the 7th of the next month
- On termination/resignation: Within 2 working days
- Payment of Bonus
- Applicable to establishments with 20 or more employees
- Employees earning ?21,000 per month or less
- Bonus range: 8.33% to 20%
- Equal Remuneration
- No gender-based wage discrimination
- No restriction on employment unless constitutionally justified
- Working Hours, Overtime & Leave
- Government to notify working hours and rest periods
- Overtime generally paid at 2× wages
- Inspector-cum-Facilitators
- Assist employers with compliance
- Conduct transparent, web-based inspections
- Registers, Records & Returns
- Employee register
- Wage register
- Bonus register
- Claims & Legal Proceedings
- Claims to be resolved within 3 months
- Claims include unpaid wages, bonus dues and illegal deductions
- Penalties
- Non-payment of wages: Fine up to ?1 lakh
- Repeat offences: Imprisonment up to 3 years
- Coverage
- All industries and establishments
- All categories of employees including contract workers
- Gig and platform workers where notified