How Code on Wages 2019 will benefit workers across India
After it received assent from the President of India on August 8, the government notified The Code on Wages 2019 which universalises the provision of minimum wages and timely payment of wages to all employees irrespective of the sector and wage ceiling. This will cover about 50 crore workers across the country. The new Code subsumed four labour laws - Minimum Wages Act, Payment of Wages Act, Payment of Bonus Act and Equal Remuneration Act and all the four Acts stand repealed. Earlier, the provisions of both the Minimum Wages Act and Payment of Wages Act would apply on workers below a particular wage ceiling working in scheduled employments only. The new code would ensure "Right to Sustenance" for every worker and intends to increase the legislative protection of minimum wage from existing about 40 percent to 100 percent of workforce, a statement from Ministry of Labour & Employment said earlier.
This would ensure that every worker gets a minimum wage which will also be accompanied by an increase in the purchasing power of the worker, thereby giving a fillip to growth in the economy. Introduction of statutory Floor Wage to be computed based on minimum living conditions, extending qualitative living conditions across the country to about 50 crore workers. It is envisaged that the states to notify payment of wages to the workers through digital mode, it said.
How does the new Wage Code work?
• The Code on Wage universalises the provisions of minimum wages and timely payment of wages to all employees irrespective of the sector and wage ceiling. This would ensure "Right to Sustenance" for every worker and intends to increase the legislative protection of minimum wage from existing about 40 percent to 100 percent of workforce.
• This will increase the purchasing power of the worker.
• The statutory Floor Wage to be computed based on minimum living conditions.
• Currently, there are 12 definitions of wages in different Labour Laws, leading to litigation besides difficulty in its implementation. In the new Code, the definition of wages has been simplified and is expected to reduce litigation and will entail at lesser cost of compliance for an employer.
• Through Code on Wages, the methodology to fix the minimum wages has been simplified and rationalised by doing away with type of employment as one of the criteria for fixation of minimum wage. The minimum wage fixation would primarily based on geography and skills. It will substantially reduce the number of minimum wages in the country from existing more than 2,000 rates of minimum wages. At present, many of the states have multiple minimum wages.
• Many changes have been introduced in the inspection regimes including web-based randomised computerised inspection scheme, jurisdiction-free inspections, calling of information electronically for inspection, composition of fines etc, the statement said.
This will ensure statutory protection for minimum wage and timely payment of wage to 50 crore worker in the country.
The Code on Wages Bill was earlier introduced in the Lok Sabha on August 10, 2017 and was referred to Parliamentary Standing Committee which submitted its Report on December 18, 2018. However, owing to the dissolution of 16th Lok Sabha, the Bill had lapsed. Therefore, a fresh Bill "The Code on Wages Bill, 2019" was drafted after considering the recommendations of the Parliamentary Standing Committee and other suggestions of the stakeholders.
The Minister of State (I/C) for Labour and Employment Shri Santosh Kumar Gangwar introduced The Code on Wages Bill, 2019 in Lok Sabha on July 23 and the Lower House cleared the Bill on July 30. The Bill received Rajya Sabha nod on August 2.