May 23, 2024

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WAGES AS PER THE NEW CODE ON WAGES 2019

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Wages are usually the payment of money for the labors or services usually under a contract on the basis of hourly charges or daily work or piecework basis.The new wage code bill was introduced Lok Sabha by the Minister of Labor, Mr. Santosh Gangwar on July 23, 2019. The purpose of the bill was to regulate a certain amount of wage and bonus payment of all the laborers and employees of any business operation or industrial work or trade or manufacturing of any kind of product in the boundary of the country has been carried out. This code of wage is necessary to maintain the minimum wages that are given to the labors and worker so that their salaries or hourly work basis payment are kept on check and they are able to maintain a life in the society, also there was no need of having different laws relating to the wages which created a misunderstanding and inaccurate calculation of wages and salaries for the employees, this act also helped the society by eliminating gender discrimination, fixing the coverage ,floor wages, determining specified minimum wages, the amount to be paid for overtime, the payment mode of wages, grounds of deduction of the wages and salaries, introducing advisory boards and also mentioning offences.

The bill replaced the following four laws as mentioned;

  1. The Payment of Wages Act,1936
  2. The Minimum Wages Act,1948
  3. The Equal Remuneration Act,1976
  4. The Payment of Bonus Act,1965

Section 3 of the code of wages 2019 states ‘prohibition of discrimination on the grounds of gender’- no employer should discriminate between the worker on the basis of their gender and therefore should provide the same amount of wage to all the workers for the same work or work of similar nature being done by the employee, it should be a gender neutral employment, even while recruiting a person for the job, the employer must not discriminate unless or until the work itself prohibits a women or is restricted by law for the time is.

Section 4 of the code of wages 2019 states ‘decision as to disputes with regard to same or similar nature of work’- as mentioned under Section 3, the gender neutrality must be maintained but if there is dispute whether the work is of similar nature or not then the authorized personas mentioned by the appropriate government.

Section 5 of code of wages 2019 states ‘payment of minimum rate of wages’- this section basically says that the employer must without fail pay the minimum rate of wages to the workers employed and no less than that as notified by the concerned government.

Section 6 of code of wages 2019 states ‘fixation of minimum wages’- subject to the provisions of section 9 the concerned government should fix the minimum wage rate of wages payable to employees in accordance to section 8. Basically, it says that the government has the full authority to fix the wage rate on the basis of hourly, weekly, pieces work or on the monthly basis and it can’t so happen that the employer underpays the employees, the rates of wages shall be such as may be prescribed by the appropriate government.

Section 7 of code of wages 2019 states ‘components of minimum wages’- any minimum wage rate fixed by the concerned government as under Section 8 must consist;

1)A basic rate of wage and an allowance at such intervals and in such manner as the appropriate Government may direct, to accord as nearly as practicable with the variation in the cost-of-living index number applicable to such workers (hereinafter referred to as “cost of living allowance”)

(b) a basic rate of wages with or without the cost-of-living allowance, and the cash value of the concessions in respect of supplies of essential commodities at concession rates, where so authorised

(c) an all-inclusive rate allowing for the basic rate, the cost-of-living allowance and the cash value of the concessions, if any.

2) The cost-of-living allowance and the cash value of the concessions in respect of supplies of essential commodities at concession rate shall be computed by such authority, as the appropriate Government may by notification, appoint, at such intervals and in accordance with such directions as may be specified or given by the appropriate Government from time to time.

Section 8 of code of wages 2019 states ‘procedure for fixing and revising minimum wages’- (1) In fixing minimum rates of wages for the first time or in revising minimum rates of wages under this Code, the appropriate Government shall either

(a) appoint as many committees as it considers necessary to hold enquiries and recommend in respect of such fixation or revision, as the case may be; or

(b) by notification publish its proposals for the information of persons likely to be affected thereby and specify a date not less than two months from the date of the notification on which the proposals shall be taken into consideration.

(2) Every committee appointed by the appropriate Government under clause (a) of sub-section (1) shall consist of persons-

(a) representing employers;

(b) representing employees which shall be equal in number of the members specified in clause (a); and

(c) independent persons, not exceeding one-third of the total members of the committee.

(3) After considering the recommendation of the committee appointed under clause (a) of sub-section (1) or, as the case may be, all representations received by it before the date specified in the notification under clause (b) of that sub-section, the appropriate Government shall by notification fix, or as the case may be, revise the minimum rates of wages and unless such notification otherwise provides, it shall come into force on the expiry of three months from the date of its issue:

Provided that where the appropriate Government proposes to revise the minimum rates of wages in the manner specified in clause (b) of sub-section (1), it shall also consult concerned Advisory Board constituted under section 42.

(4) The appropriate Government shall review or revise minimum rates of wages ordinarily at an interval not exceeding five years.

Section 9 of the code of wages 2019 states ‘power of central government to fix floor wages’-(1) The Central Government shall fix floor wage taking into account minimum living standards of a worker in such manner as may be prescribed:

Provided that different floor wage may be fixed for different geographical areas.

(2) The minimum rates of wages fixed by the appropriate Government under section 6 shall not be less than the floor wage and if the minimum rates of wages fixed by the appropriate Government earlier is more than the floor wage, then, the appropriate Government shall not reduce such minimum rates of wages fixed by it earlier.

(3) The Central Government may, before fixing the floor wage under sub-section (1), obtain the advice of the Central Advisory Board constituted under sub-section (1) of section 42 and consult State Governments in such manner as may be prescribed.

Section 10 of the code of wages 2019 states ‘wages of employee who works for less than normal working hours’-If an employee whose minimum rate of wages has been fixed under this Code by the day works on any day on which he was employed for a period of less than the requisite number of hours constituting a normal working day, he shall, save as otherwise hereinafter provided, be entitled to receive wages in respect of work done on that day, as if he had worked for a full normal working day.

As the study suggests, the new code has taken new and positive steps toward simplifying and closing loopholes in the existing wages systems, this code promises to assist the economy of the country and so the people of the nation by providing proper guidelines as to how and what procedure needs to be followed to calculate, circulate or distribute the wages. 

The code also provides protection to the all workers employed in all establishments with a few exceptions.

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