Wage code bill Current Affairs

Cabinet approves new wage code bill to ensure minimum wage across all sectors

The Union Cabinet has approved the Labour Code on Wages Bill which will ensure a minimum wage across all sectors by integrating existing labour related laws.

The Labour Code on Wages Bill consolidates the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965, the Payment of Wages Act, 1936 and the Equal Remuneration Act, 1976.

Background

At present, laws on wages do not cover workers getting monthly wage of more than Rs 18,000. Moreover, these laws are only applicable for scheduled industries or establishments. Even there are about half a dozen definitions of wages in various acts across the Centre and states, which employers have to grapple with. The Second National Commission on Labour has recommended that the existing labour laws should be broadly grouped into four or five labour codes on Wages; Industrial Relations; Social Security & Welfare and Safety and Working Conditions on functional basis.

Key Facts

Under the Labour Code on Wages Bill, the Union Labour Ministry is planning to streamline the definition of wages by amalgamating four wage-related statutes. The code empowers the Centre to set a minimum wage across sectors, and states will have to maintain that. However, states will be able to provide higher minimum wage in their jurisdiction than fixed by the Centre since labour is subject in the concurrent list.

The Labour Code on Wages Bill also marks the first major initiative of Union Government in amalgamating labour laws for improving the ease of doing business as well as ensuring universal minimum wage to all. The minimum wage will be applicable on all classes of workers, even workers getting monthly pay of higher than Rs 18,000 will be legally entitled to a minimum wage. The proposed legislation is expected to benefit over 4 crore employees across the country.

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