Lok Sabha Passes the Code on Wages Bill, 2019

Lok Sabha today passed The Code on Wages Bill, 2019. While opening the
discussion for consideration and passing of the Bill,  Minister of State
(I/C) for Labour and Employment Shri Santosh Kumar Gangwar said that it
is a historic Bill which aims to transform the old and obsolete labour
laws into more accountable and transparent ones which is need of the
hour. As many as 17 present labour laws are more than 50 years old and
some of them even belong to pre-independence era.

the four Acts being subsumed in The Code on Wages Bill, The Payment of
Wages Act, 1936 belongs to pre-independence era and The Minimum Wages
Act 1948 is also 71 years old. The Payment of Bonus Act, 1965 and The
Equal Remuneration Act, 1976 are also being subsumed in the Code. 
further said that wide consultations were held with trade unions,
employers and State governments and tripartite consultations were held
on 10th March, 2015 and 13th April, 2015. A draft
of Wage Code was made available in public domain through Ministry’s
website. Many persons gave their valuable suggestions. The Bill was
introduced in last Lok Sabha on 10 August, 2017 and was referred to
Parliamentary Standing Committee which submitted its Report on 18th December 2018. Out of 24 recommendations made by standing committee, 17 were accepted by government.
further said that the Code ensures minimum wages along with timely
payment of wages to all the employees and workers. Many unorganized
sector workers like agricultural workers, painters, persons working in
restaurants and dhabas, chowkidars etc. who were out of the ambit of
minimum wages will get legislative protection of minimum wages after the
bill becomes an Act. It has been ensured in the bill that employees
getting monthly salary shall get the salary by 7th of next
month, those working on weekly basis shall get the salary on last day of
the week and daily wagers should get it on the same day.
expressed hope that The Code on Wages will prove to be a milestone and
give respectable life to 50 crore unorganized sector workers. The
Minister responded to the debate in detail and thanked all the respected
members for cooperation in passing the Bill.
The salient features of the Code are as following:
Code on Wage universalizes the provisions of minimum wages and timely
payment of wages to all employees irrespective of the sector and wage
ceiling. At present, the provisions of both Minimum Wages Act and
Payment of Wages Act apply on workers below a particular wage ceiling
working in Scheduled
Employments only. This would ensure “Right
to Sustenance” for every worker and intends to increase the legislative
protection of minimum wage from existing about 40% to 100% workforce.
This would ensure that every worker gets minimum wage which will also be
accompanied by increase in the purchasing power of the worker thereby
giving fillip to growth in the economy. Introduction of statutory Floor
Wage to be computed based on minimum living conditions, will extend
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.

There are 12 definitions of wages in the different Labour Laws leading
to litigation besides difficulty in its implementation. The definition
has been simplified and is expected to reduce litigation and will entail
at lesser cost of compliance for an employer. An establishment will
also be benefited as the number of registers, returns, forms etc., not
only can be electronically filed and maintained, but it is envisaged
that through rules, not more than one template will be prescribed.

At present, many of the states have multiple minimum wages. 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 2000 rates of 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. All these changes will be conducive for
enforcement of labour laws with transparency and accountability.
There were instances that due to smaller limitation period, the claims
of the workers could not be raised. To protect the interest of the
workers, the limitation period has been raised to 3 years and made
uniform for filing claims for minimum wages, bonus, equal remuneration
etc., as against existing varying period between 6 months to 2 years.

It can be said that a historical step for ensuring statutory protection
for minimum wage and timely payment of wage to 50 crore worker in the
country has been taken through the Code on Wages besides promoting ease
of living and ease of doing business.