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The Code on Wages Bill, 2019: Awaiting the Parliamentary nod

THE CODE ON WAGES BILL, 2019

DATE OF INTRODUCTION IN THE LOK SABHA: 23-07-2019

STATUS: PENDING

SALIENT FEATURES/IMPACT ON COMPANIES/PENALTIES

·  Replacement & Repealing: Subsumes relevant provisions of The Minimum Wages Act, 1948, The Payment of Wages Act, 1936, The Payment of Bonus Act, 1965 and The Equal Remuneration Act, 1976. After the enactment, all four Acts to get repealed.

·  Appropriate Authority: Central Government – States not allowed to fix minimum wages below National Minimum Wages. States to ensure that minimum wages set by them are not lower than the national minimum wage. If existing minimum wages set by the states are higher than the national minimum wage, they cannot reduce the minimum wages.

·  Ease of Doing Business: Registers, returns, forms etc., can be electronically filed and maintained. Web based random computerized inspection scheme, jurisdiction-free inspections, calling of information electronically for inspection, composition of fines etc.

·  Basis of Minimum Wage Fixation:  Based on geography, skills and minimum living conditions

·  Overtime:  At least twice the normal rate of wages (no change)

·  Grounds for Deduction: (i) fines, (ii) absence from duty, (iii) accommodation given by the employer, or (iv) recovery of advances given to the employee, among others.  Deductions should not exceed 50% of the employee’s total wage.

·  Penalties: (i) paying less than the due wages, or (ii) for contravening any provision of the Code.  Penalties vary depending on the nature of offence, with the maximum penalty being imprisonment for three months along with a fine of up to 1 lakh rupees.

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