Introduction – Code on Wages
The Code on Wages, 2019 is a significant piece of legislation that consolidates and amend the four labour laws related to wage and bonus, including the Minimum Wages Act, 1948; Payment of Wages Act, 1936; Payment of Bonus Act, 1965; and Equal Remuneration Act, 1976. It aims to simplify, modernize and streamline the wage-related regulatory framework to ensure fair and equitable treatment of employees across all sectors.
- Code on Wages, 2019 replaces the following laws:
- Minimum Wages Act, 1948 [Section 5 – 14]
- Payment of Wages Act, 1936 [Section 15 – 25]
- Payment of Bonus Act, 1965 [Section 26 – 41]
- Equal Remuneration Act, 1976 [Section 43 – 50]
Here’s a comparison table to assist the user in understanding the key changes being introduced by the Code on Wages, 2019:
| Provisions | Before | After |
| Definition of wages | Includes house rent allowance. [S.2(b) of Minimum Wages Act, 1948]. | Excluded as per Section 2(y) |
| Definition of employer | 4 (1 each under Minimum Wages, Payment of Bonus, Payment of Wages, and Equal Remuneration Act). | directly or through any person, or on his behalf or behalf of any person, one or more employees. |
| Maintaining records or register | Total 10 Registers 4- Minimum Wages Act, 2- Payment of Wages Act 3- Payment of Bonus Act 1- Equal Remuneration Act. | Only 2 Register: Employee register under Form IV; and Register of Wages, overtime,fine, deductions for damages and loss under Form- I. |
| Returns | According to Section 5(1b), any railway, factory industrial, or other establishment shall be paid before the expiry of the tenth day. | Only 1 return. |
| Fixed minimum wages | Applicable to all unorganized and organized. No ceiling on the number of employees set. | For scheduled employments with more than 1000 employees. [Section 2(1A) of Minimum Wages Act, 1948]. |
| Time of payment of wages | Fine up to Rs.50000/-. For repeated offence within 5 years: upto 3 Months imprisonment or upto Rs. 1 lakh fine or both | Irrespective of the number of employees and employment type, payment must be made on or before 7th day of month. |
| Period of revision of minimum wages | At least once in every 5 years. | In intervals not exceeding 5 years. |
| National minimum wages | ___ | The central government may set national minimum wages, which may differ for different states and region and fix different floor wages for different geographical areas in consulatation with state government. |
| Over time wages | Set by government. | 2 times the normal wage. |
| Period of claim for wages | Within 6 months [S.20 of Minimum Wages Act, 1948] | Within 3 years |
| Penalties A/c to Minimum Wages Act 1. Paying less than minimum wages 2. Not providing a day of rest in the week. | According to Section 7 of the Payment of Wages Act, if payment exceeds 75%, the excess amount may be recovered in such a manner. | If the payment exceeds 50%, the excess amount may be recovered in such manner. |
| Payment of wages applicability | For employees whose wages do not exceed Rs.24000/- per month. | Applicable to all employees. |
| Deduction in case of payment to cooperative society | Penalties according to Payment of Wages Act 1. Non-payment of wages at specified period 2. Unauthorized deduction from wages | Fine up to Rs.7500 |
| Final payment time limit applicable in case of | Dismissal or retrenchment. Not applicable in case of resignation. | Condition of resignation added. |
| Fine up to Rs.50000/-. For repeated offence within 5 years: up to 3 months imprisonment or upto Rs. 1 lakh fine or both. | Includes a fine of up to Rs.500/- and imprisonment of up to 6 months. | To organizations with 20 or more persons and whose wages do not exceed Rs.21000/- per month |
| Bonus Applicability | Fine up to Rs.20000/-. For subsequent offenses within 5 years, a fine up to Rs.40000 or 1 month imprisonment or both. | Monthly amount notified by the government. |
| Person or company who does not comply with the Payment of Bonus Act: imprisonment up to 6 months or fine up to Rs.1000/- | Penalties according to the Payment of Bonus Act | Person or company who does not comply with this code: Fine up to Rs. 20000/-. And for subsequent offences within 5 years- 1 Month imprisonment or fine upto Rs.40000 or both. |
| Gender discrimination prohibition | In wage payment. | In wage payment and recruitment. |
| Penalties according to Equal Remuneration Act 1. Non Maintenance of document in retain to employees 2. Discrimination against women in recruitment. | Fine upto Rs.20000/-. For subsequent offenses within 5 years, a fine up to Rs.40000 or 1 month imprisonment or both. | Fine upto Rs.20000/-. For subsequent offenses within 5 years, a fine up to Rs.40000 or 1 month imprisonment or both. |
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