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.