Government has notified the labour code on wages paving way for 50 crore workers to become eligible for mandatory minimum wages. The bill got the assent of the President on August 8, 2019 following which ministry of law and justice has published it in the gazette.
This is the first in a series of four labour codes proposed in the government’s labour reform initiative. The minimum wage fixed by the Centre will no longer be based on employment but on geography and skills.
As many as 17 labour laws are more than 50 years old and some even belong to the pre-Independence era. Labour ministry will soon notify the minimum wages in the country.
The code ensures minimum wages along with timely payment of wages to all employees and workers. Many unorganised sector workers like agricultural workers, painters, persons working in restaurants and dhabas and chowkidars, who were outside the ambit of minimum wages, will get legislative protection of minimum wages after the bill becomes an act.
Besides, the bill will ensure that employees getting a monthly salary are paid by the 7th of the following month. Those working on a weekly basis will be paid on the last day of the week and daily wagers should get them on the same day.
The Code on Wages seeks to universalise the provisions of minimum wages and timely payment of wages, which will be computed based on minimum living conditions. It is envisaged that states will notify payment of wages to workers through digital mode .
The bill was first introduced in the Lok Sabha in 2017 and was referred to the parliamentary standing committee, which submitted its report in December 2018. However, the bill lapsed after the dissolution of the 16th Lok Sabha.
Under the code on wages, the labour ministry plans to streamline the definition of wages by amalgamating four related statutes: the Minimum Wages Act, 1948, the Payment of Wages Act, 1936, the Payment of Bonus Act, 1965, and the Equal Remuneration Act, 1976.
There are currently about half a dozen definitions of wages in various acts across the Centre and the states, which employers must grapple with.
The labour ministry has decided to amalgamate 44 labour laws into four codes — on wages, industrial relations, social security, and safety, health and working conditions.