Fact Box: The Code on Wages Bill, 2017

The Union Government as part of labour law reforms has undertaken drive to rationalize 38 Labour Acts by framing 4 labour codes viz Code on Wages, Code on Social Security, Code on Industrial Relations and Code on occupational safety, health and working conditions. The codification of labour Laws will remove multiplicity of definitions and authorities leading to ease of compliance without compromising wage security and social security to workers.

The Code on Wages Bill, 2017

The bill was introduced in Lok Sabha recently. It subsumes and repeals 4 existing Laws, viz. Minimum Wages Act, 1948; Payment of Wages Act, 1936; Equal Remuneration Act, 1976 and Payment of Bonus Act, 1965. It will apply to establishments where trade, business, manufacturing or occupation is carried out. It will also include government establishments.

Features of the Bill

National minimum wage: The code ensures minimum wages to one and all and timely payment of wages to all employees irrespective of the sector of employment without any wage ceiling. It introduces concept of statutory National Minimum Wage for different geographical areas. It will ensure that no state government fixes minimum wage below the National Minimum Wages for that particular area as notified by Union Government. It specifies that central or state governments will revise or review minimum wage every five years.

Advisory boards:  The central and state governments will constitute their respective advisory boards to advise respective governments on aspects of fixing minimum wages and increasing employment opportunities for women.  These boards will have representation from employees, employers, and independent persons.  Further, one-third of total members will be women. 

Payment of Wages:  The code proposes payment of wages through cheque or digital/electronic mode along with conventional cash payments. It mentions deduction of employee’s wages on certain grounds by not exceeding 50% of employee’s total wage.

Redressal of grievances and settlement of claims: It proposes appellate authority between Claim Authority and Judicial Forum for speedy, cheaper and efficient redressal of grievances and settlement of claims

Offences: The Code specifies penalties for offences committed by an employer. Such penalties vary depending on nature of offence have been rationalized with the amount of fines varying as per gravity of violations. Moreover it specifies that compounding of offences are not punishable by penalty of imprisonment.

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