The Code on wages
The Code on Wages:-List of Acts amalgamated in code on wages and few definitions
This Code has 9 Chapters, 67 Sections & 26 definitions, Amalgamation of 4 existing laws in this code, namely
- The Payment of Wages Act, 1936
- The Minimum Wages Act, 1948
- The Payment of Bonus Act, 1965
- The Equal Remuneration Act, 1976
Key Areas Covered in Transition Services
Establishments
Any place where any industry, trade, business, manufacture or occupation is carried on and include Government establishment
Employer
Means a person who employs, whether directly or through any person, or on his behalf or on behalf of any person, one or more employees in his establishment.
Workers
Any person (except an apprentice) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward.
Employee
Any person employed on wages by an establishment to do any skilled, semi-skilled or unskilled, manual, operational, supervisory, managerial, administrative, technical or clerical work for hire or reward.
Wages
- Means all remuneration whether by way of salaries, allowances or otherwise, if the terms of employment, were fulfilled, be payable to a person employed in respect of his employment which Includes Basic Pay, Dearness allowance & Retaining Allowance
Appropriate Government:
In relation to an establishment carried on under authority of Central Government – railways, mines, oil field, major ports, air transport, telecommunication, banking & insurance company or a corporation or other authority established
Key Areas Covered in Transition Services
| S.No. | Act | Existing Provisions | Proposed Changes |
|---|---|---|---|
| 1 | Minimum Wages Act, 1948 | Applicability – Only to scheduled employments and those working in such scheduled employments. | Applicability – To all the establishments and employees. |
| 2 | Payment of Wages Act, 1936 | Applicability – To all scheduled establishments and all employees drawing less than ₹24,000. | Applicability – To all the establishments and employees. |
| 3 | Payment of Wages Act, 1936 | Monthly Payment/Salary – Payable: (i) Up to 1000 employees – on or before 7th of succeeding month. (ii) Above 1000 employees – on or before 10th. | Monthly Payment/Salary – Payable on or before 7th of succeeding month, irrespective of the number of employees. |
| 4 | Payment of Wages Act, 1936 | Full and final settlement in the subsequent month, based on employee count (see Point 3). Gratuity payable within 30 days of last working day. | Full and final settlement – Wages to be paid within 2 working days of separation. No change to Gratuity. |
| 5 | Payment of Bonus Act, 1965 | Mode of Payment of Bonus – By cash / DD / Bank Credit only. | Mode of Payment of Bonus – By Bank Credit only. |
| 6 | Payment of Bonus Act, 1965 | Disqualification for Bonus – Gross Misconduct. | Disqualification for Bonus – Now includes Gross Misconduct and “Conviction of Sexual Harassment.” |
| 7 | (i) Minimum Wages Act, 1948; | Definition of Wages – Differs from Act to Act. | Common Definition of Wages across all four Acts. |
Returns & Records to be updated:
Chapter VIII of Wage Code Rule 2020 describes manner for enquiry, impose fine and Forms, Registers and Wage Slip to be generated:-
● Need to maintain a register – register for persons employed, muster roll, wages and other details as prescribed;
● Require to display a notice on the notice board – at a prominent place containing abstract of Code, category-wise wage rates,
wage period, day or date and time of payment of wages, & name & address of Inspector-cum-Facilitator; and
● Need to issue wage slips to the employees
● Above provisions shall not apply in respect of employer to the extent he employs not more than five persons for agriculture or domesticpurpose – but if demanded must provide reasonable proof of the payment of wages.
● No fine shall be imposed until such employee has been given an opportunity of showing cause against the fine.
● Total amount of fine shouldn’t exceed 3% of wages for that wage period.
● No fines in installment or after 90 days of offense
● Register for fines and such amount should be used for benefit of employees.
● Recovery of advance shall as may be prescribed
Offences & Penalties: Cognizance of Offences:-
● No court shall take cognizance of any offence punishable under this Code except on a compliant made by –
○ Authority/official of appropriate Government or
○ by an employee or
○ a registered Trade Union or
○ an Inspector-cum-Facilitator.
● No court inferiorto that of a Metropolitan Magistrate or Judicial Magistrate of the first class shall try the offences under this Code
● For imposing penalty appropriate Government to appoint officer not below the rank of Under Secretary –
○ for holding enquiry and to summon & enforce attendance of any person acquainted with the case to give evidence or to produce
any document, and
○ if, on such enquiry, he is satisfied that the person has committed any offence, he may impose such penalty as he thinks fit
| No. | Type of Offence | Amount of Penalty on Employer |
|---|---|---|
| 1 | First offence: Pays any employee less than the amount due under this Code. | Punishable with a fine up to fifty thousand rupees. |
| 2 | Repeat offence: Similar to 1 above within five years from the date of the first or subsequent offence. | Punishable with imprisonment up to three months or a fine up to one lakh rupees, or both. |
| 3 | First offence: Contravenes any other provision of this Code or any rule/order made or issued thereunder. | Punishable with a fine up to twenty thousand rupees. |
| 4 | Repeat offence: Similar to 3 above within five years from the date of the first or subsequent offence. | Punishable with imprisonment up to one month or a fine up to forty thousand rupees, or both. |
| 5 | Offences of non-maintenance or improper maintenance of records in the establishment. | Punishable with a fine up to ten thousand rupees. |
Frequent Ask Question?
How many exiting Acts have been subsumed under the Code on Wages, 2019 and what are those?
Acts namely, Payment of Wages Act, 1936, Minimum Wages Act, 1948, Payment of Bonus Act, 1965 and the Equal Remuneration Act, 1976.
What are the fundamental reforms introduced under the Code on Wages, 2019?
The fundamental reforms introduced under the Code on Wages, 2019 include:
1. Universalizes provisions of minimum wages and timely payment of wages
2. Removes multiplicity of definitions and authorities
3. Changes the role of Inspector to Inspector cum Facilitator.
Who is an employer in relation to an establishment, which is a factory as per the provisions of Code on Wages, 2019?
The occupier of the factory and where a person has been named as a manager of the factory, the person so named, as per the relevant provisions of the Factories Act, 1948.
What is meant by ‘same work or work of a similar nature’ in the context of Code on Wages, 2019 ?
Same work or work of a similar nature’ means the work in respect of which the skill, effort, experience and responsibility required are the same, when performed under similar working conditions by employees and the differences, if any, are not of practical importance in relation to the terms and conditions of employment.
What are the two methods for fixation or revision of minimum rates of wages under the Code on Wages, 2019?
What are the two methods for fixation or revision of minimum rates of wages under the Code on Wages, 2019?
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