Get an expert at affordable price

The code seeks to universalise the provisions of minimum wages and bonus payment to employees. The code will enable timely payment of wages.

The code has subsumed and repeal the following four labour laws:

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

Coverage of the Code on wages:

The code on wages is applied to both organised and unorganised sectors.

The State Government will responsible for implementing for policy measures for private sector establishment. Whereas, the Central Government will continue to make wages related decision of mines, railways, oil-fields, and other central public sector undertakings.

Chapters in the code on wages:

The code has nine chapters as follows:

• Chapter I contains definitions and coverage;
• Chapter II contains provisions related to payment of minimum wages;
• Chapter III contains provisions related to payment of wages;
• Chapter IV contains provisions related to payment of bonus;
• Chapter V provides for formation of Central Advisory Board and State Advisory Board;
• Chapter VI contains manner of payment of dues, claims and audit;
• Chapter VII contains appointment of Inspectors cum facilitators and their powers;
• Chapter VIII lists out offences and penalties;
• Chapter IX lists out miscellaneous provisions;

Few key features of the code on wages:

     i.        Definition of wages:

Under the provisions of code on wages, wages means all remunerations by way of salary, allowances or any monetary payments and includes:

1. Basic pay;
2. Dearness allowances;
3. Retaining allowances, if any;

But does not include:

1. Bonus payment;
2. Housing accommodation;
3. Contribution to pension or provident fund;
4. Conveyance allowances;
5. House rent allowances;
6. Overtime allowances;
7. Commissions  payment;
8. Gratuity;
9. Retrenchment Compensation;

   ii.        Distinction between ‘Employee’ and ‘worker’:

Employee means any person employed on wages by an establishment to do any skilled, semi-skilled or unskilled, manual, operational, supervisory, managerial, administrative, technical or clerical work for hire or reward;

Worker any person (except an apprentice) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied, and includes—

(i) working journalists, and

(ii) sales promotion employees, and for the purposes of any proceeding under this Code in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched or otherwise terminated in connection with, or as a consequence of, that dispute,or whose dismissal, discharge or retrenchment has led to that dispute;

but does not include any such person––

(i) who is subject to the Air Force Act, 1950, or the Army Act, 1950, or the Navy Act, 1957; or

(ii) who is employed in the police service or as an officer or other employee of a prison; or

(iii) who is employed mainly in a managerial or administrative capacity; or

(iv) who is employed in a supervisory capacity drawing wage of exceeding fifteen thousand rupees per month or an amount as may be notified by the Central Government from time to time.

  iii.        Gender Discrimination

There shall be no discrimination in an establishment or any unit thereof among employees on the ground of gender in matters relating to wages by the same employer, in respect of the same work or work of a similar nature done by any employee

  iv.        Working hours and overtime

The Central or State Government will determine the number of hours that constitutes a normal working day.

   v.        Floor wages

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.

  vi.        Permissible deductions

The code on wages stipulates the deduction from the wages of an employee may be made only for the following purposes:

1. Fines imposed;
2. Deduction from absence of duty;
3. Deductions on damage or loss of goods;
4. Deductions for house accommodation provided by employer;
5. Deductions for such amenities and services supplied by the employer

Also read:

• Karnataka Professional Tax Registration
• HSN Code (Harmonized System of Nomenclature)
• Corporate Social Responsibility (CSR)
• FAQs on ESI scheme(Opens in a new browser tab)
• Karnataka Professional Tax