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The Code on Wages 2019
August 6 , 2019
1810 days
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- Parliament has passed the Code on Wages, 2019.
- It seeks to regulate wage and bonus payments in all employments where any industry, trade, business, or manufacture is carried out.
- The Code will apply to all employees.
- The central government will make wage-related decisions for employments such as railways, mines, and oil fields, among others.
- State governments will make decisions for all other employments.
- The Code replaces the following four laws
- The Payment of Wages Act, 1936
- The Minimum Wages Act, 1948
- The Payment of Bonus Act, 1965
- The Equal Remuneration Act, 1976.
Floor Wage
- Based on living standards of workers, the central government will fix a “Floor Wage”.
- The “Minimum Wages” decided by the central or state governments must be higher than the floor wage.
Minimum Wage
- The Code prohibits employers from paying wages less than the minimum wages.
- Minimum wages will be notified and fixed by the central or state governments based on
- Skill of workers
- Difficulty of work
Overtime
- In case employees work in excess of a normal working day, they will be entitled to overtime wage.
- The overtime wage must be at least twice the normal rate of wages.
Determination of bonus
- The bonus will be at least 8.33% of an employee’s wages.
- An employee can receive a maximum bonus of 20% of his annual wages.
Advisory Boards
- The central and state governments will constitute Advisory Boards, which will advise the respective governments on various issues including
- Fixation of minimum wages
- Increasing employment opportunities for women.
Gender Discrimination
- The Code prohibits gender discrimination in matters related to wages and recruitment of employees for the same work or work of similar nature.
Penalties for Employers
- The Code specifies penalties for offences committed by an employer, such as paying less than the due wages, or for contravening any provision of the Code.
- Maximum penalty is imprisonment for three months along with a fine of up to one lakh rupees.
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