Explore the Code on Wages (Central) Rules, 2020: Insights into enforcement, minimum wages, working hours, and regional adaptations. Dive into state-wise analyses for a comprehensive understanding.
The central government has published the Code on Wages (Central) Rules, 2020 (Rules) under the power conferred by section 67 of the Code on Wages, 2019 (29 of 2019). The Rules were published on 7th July, 2020 under Official Gazette.
The following are the major topics covered under the rules –
- Enforcement
The rules will come into force on the date when the commencement of the Code on Wages, 2019 (29 of 2019) or on such date as specifically provided under the Code.
- Minimum Wages
The rules provide the procedure and criteria and norms for setting the minimum wages for various geographical areas in India. When the rate of wages for a day is fixed, then, such amount shall be divided by eight for fixing the rate of wages for an hour and multiplied by twenty six for fixing the rate of wages for a month and in such division and multiplication the factors of one-half and more than one-half shall be rounded as next figure and the factors less than one-half shall be ignored.
- Number of hours of work in a normal working day
The normal working day as per section 13 of Code of Wages shall consist of eight hours of work and one or more intervals of rest which in total shall not exceed one hour. Further, the working day of an employee shall be arranged in such a way it shall not spread over more than twelve hours on any day inclusive of the intervals of rest, if any.
Update –
According to sources, the new labour codes may usher in a four-day workweek, as opposed to the current five-day workweek from 2022-23. With this, an employee will be able to enjoy a 3-day holiday/week, however, they will have to work for 12 hours on those four days to keep the weekly work hours in check. The Labour Ministry has asserted that even if the proposal comes through, the 48-hour weekly work requirement has to be met.
However, there has not been any such proposal as of yet.
- Floor Rate
The rules provide the procedure and criteria and norms for setting the floor wages for various geographical areas in India. The rate will be fixed by the Government subject to the advice of the Central Advisory Board.
- Payment of Wages
Under chapter IV the Rules provide the procedure for recovery of the deductions made by the employer from the salary of the employee. Along with this, the chapter further states the procedure to impose a fine over the employee under section 19 of the Code of Wages.
- Payment of Bonus
The next chapter of the Rules, refers to various Schedules (annexed at the end of the Rule) for calculating the amount of bonus to be paid to the employee. The amount of bonus shall not be less than 8.33 per cent of the annual salary or wage payable to all the employees upto the maximum bonus of twenty per cent of the annual salary or wage of all the employees.
- Central Advisory Board
The constitution of the Board, terms of office of officials and procedure of the operations of the Board is provided under Chapter VI of the Rules.
- Payment of Dues, Claims etc
The rule provides that where any amount payable to an employee under the Code is due after his death or on account of his whereabouts not being known, and the amount could not be paid to the nominee of the employee until the expiry of three months from the date the amount had become payable then, such amount shall be deposited by the employer with the Deputy Chief Labour Commissioner (Central) having jurisdiction.
The amount deposited with the Deputy Chief Labour Commissioner (Central) having jurisdiction shall remain with him and be invested in the Central or State Government Securities or deposited as a fixed deposit in a scheduled bank.
- Forms, Registers and Pay Slips
A single application shall be filed under the Code of Wages on behalf or in respect of any number of employees employed in an establishment in Form-II along with documents specified in such Form.
All fines and all realizations thereof referred to in the Code of Wages shall be recorded in a register to be kept by the employer in form – I. Every employer of an establishment to which the Code applies shall maintain registers in Form I and Form IV.
Further, every employer shall issue wage slips, electronically or otherwise to the employees in Form V.
Amendments
The Rules are subject to amendments by the centre and the States to make it more customised as per the requirement of the respective state. Since labour is a concurrent subject, the states are given time to draft their own customised rules.
Analysis of Code of Wages Rules – Major States
Delhi
The Labour Department of Delhi issued Draft Code on Wages (Delhi) Rules, 2021 on 26.11.2021 for operating under Code of Wages, 2019.
- Applicability
The rules shall be applicable to the National Capital Territory of Delhi from the date of enforcement of Code on Wages, 2019 or after the date of their final publication in the Official Gazette.
- Minimum Wages
Like Code on Wages (Central) Rules, Code on Wages (Delhi) Rules also provides the procedure and criteria and norms for setting the minimum wages for workers in National Capital Region (NCR) India.
However, there are some amendments made by the Delhi Labour Department. The amendments have been stated below –
| Particular | Code on Wages (Central) Rules, 2020 | Code on Wages (Delhi) Rules, 2021 |
| Minimum Wages Criteria Requirements under Rule 3 (1)(ii) | A net intake of 2700 calories per day per consumption unit | A net intake of 2731 calories per day per consumption unit |
- Time Interval for revision of dearness allowance
The time interval for revision of the said allowance as provided under the rules are once before 1st April and then before 1st October in every year to revise the dearness allowance payable to the employees on the minimum wages.
- Number of hours of work in a normal working day
The normal working day as per section 13 of Code of Wages shall consist of eight hours of work and one or more intervals of rest which in total shall not exceed one hour. Further, the working day of an employee shall be arranged in such a way it shall not spread over more than twelve hours on any day inclusive of the intervals of rest, if any.
- Payment of full wages in case of working for less than requisite working hours.
Section 10 of Code of Wages 2019 provides that if an employee is employed for less than requisite working hours for a work for which minimum wages has been fixed under the Code, he shall be paid for full day as if he had worked for a full normal working day.
No provision regarding this has been provided under Code on Wages (Central) Rules but Code on Wages (Delhi) Rules provides that such payment shall not be made in case the employee is not entitled to receive such wage under any other law.
- Floor Rate
Code on Wages (Delhi) Rules does not provide for the provisions for fixing of floor rate as it is to be determined by the Centre.
- Delhi State Advisory Board on Wages
The constitution of the Board, terms of office of officials and procedure of the operations of the Board is provided under Chapter V of the Rules.
The provisions for Payment of Wages, Payment of Bonus, Payment of Dues, Claims etc , Forms, Registers and Pay Slips under Code on Wages (Delhi) Rules are similar to the provisions stated under Code on Wages (Central) Rules covered under the 1st part of the article.
Maharashtra
The Labour Department of Maharashtra issued draft Maharashtra Code on Wages Rules, 2021 on 03.11.2021 for operating under Code of Wages, 2019.
- Applicability
The rules shall be applicable in the State of Maharashtra from the date of enforcement of Code on Wages, 2019 or after the date of their final publication in the Official Gazette, however, such has not been specified under the Rules.
- Number of hours of work in a normal working day
An employee shall be required or allowed to work in an establishment for more than forty-eight hours in a week. No employee shall be allowed to work for more than five hours continuously before he has had an interval for rest of at least half an hour
However, there are some amendments made by the Maharashtra Labour Department. The amendments have been stated below –
| Particular | Code on Wages (Central) Rules, 2020 | Maharashtra Code on Wages Rules, 2021 |
| Hours of Work stretched in a day under Rule 6(1)() | The working day of an employee shall be arranged in such a way it shall not spread over more than twelve hours on any day inclusive of the intervals of rest |
|
- Weekly Rest
An employee shall be allowed rest of one day or more than one day, every week which in case of six day week shall ordinarily be Sunday and in case of less than six day week shall ordinarily be Saturday and Sunday. However, the employer may fix any other days of the week as the rest days for any employee or class of employees.
- Calculation of wages for part time employee
If any employee who is not in employment for a normal working day but has worked for not less than four hours in a working day shall be eligible for minimum wages computed by dividing the daily rate of minimum wages by eight (hours) with fifteen per cent. rise in it and the quotient being stepped up to the nearest paisa.
- Floor Rate
Maharashtra Code on Wages Rules does not provide for the provisions for fixing of floor rate as it is to be determined by the Centre.
- Payment of Bonus
Maharashtra Code on Wages Rules does not provide for the provisions for payment of bonus, thus it can be interpreted that it shall adopt the provisions from to be determined by the Code on Wages (Central), Rules.
- State Advisory Board on Wages
The constitution of the Board, terms of office of officials and procedure of the operations of the Board is provided under Chapter V of the Rules.
- Forms, Registers and Pay Slips
A single application shall be filed under the Code of Wages on behalf or in respect of any number of employees employed in an establishment in Form-II along with documents specified in such Form.
Any person aggrieved by an order passed by the authority may prefer an appeal under sub-section (1) of section 49 in Form-IV electronically or by registered post. Every employer of an establishment to which the Code applies shall maintain, electronically or in physical form, in the formats appended to these rules, the following registers:-
(i) Employee Register in Form VI,
(ii) Register of Attendance, Wages, Overtime, Fines and Deductions for Damage and Loss in Form VII.
All fines and all realisations thereof and deductions shall be recorded in a register to be kept by the employer electronically or in physical form in Form – VII. Further, every employer shall issue wage slips, electronically or otherwise to the employees in Form VIII.
The provisions for Minimum Wages, Time Interval for revision of dearness allowance
, Payment of Wages, Payment of Dues, Claims etc , under Maharashtra Code on Wages Rules are similar to the provisions stated under Code on Wages (Central) Rules covered under the 1st part of the article.
Karnataka
The Labour Department of Karnataka issued Draft Code on Wages Karnataka Rules, 2021 on 02.03.2021 for operating under Code of Wages, 2019.
- Applicability
The rules shall be applicable in the State of Karnataka and shall come into force on the date of their final publication in the Official Gazette.
- Time Interval for revision of dearness allowance
The time interval for revision of the said allowance as provided under the rules for essential commodities at concession rate shall be computed before 1st April of every year to revise the dearness allowance payable 4 to the employees on the minimum wages. The revised dearness allowance so calculated, shall be payable from April 1st of every year.
- Extent of loan and rate of interest
The Employee may be granted loans to the extent of ten times the salary drawn by the employee at the bank rate of interest on loans.
- Floor Rate
Code on Wages Karnataka Rules does not provide for the provisions for fixing of floor rate as it is to be determined by the Centre.
- Payment of Bonus
Code on Wages Karnataka Rules does not provide for the provisions for payment of bonus, thus it can be interpreted that it shall adopt the provisions from to be determined by the Code on Wages (Central), Rules.
- State Advisory Board
The constitution of the Board, terms of office of officials and procedure of the operations of the Board is provided under Chapter V of the Rules.
The provisions for Minimum Wages, Number of hours of work in a normal working day, Weekly day of rest, , Payment of Wages, Payment of Dues, Claims etc, Registers and Pay Slips, under Code on Wages Karnataka Rules are similar to the provisions stated under Code on Wages (Central) Rules covered under the 1st part of the article.
Haryana
The Labour Department of Haryana issued Draft Code on Wages (Haryana) Rules, 2021 on 16.11.2021 for operating under Code of Wages, 2019.
- Applicability
The rules shall be applicable to the whole of the State of Haryana and shall come into force on the date of their final publication in the Official Gazette.
- Payment of full wages in case of working for less than requisite working hours.
Section 10 of Code of Wages 2019 provides that if an employee is employed for less than requisite working hours for a work for which minimum wages has been fixed under the Code, he shall be paid for full day as if he had worked for a full normal working day.
No provision regarding this has been provided under Code on Wages (Central) Rules but Code on Wages (Haryana) Rules, 2021 provides that such payment shall not be made in case the employee is not entitled to receive such wage under any other law.
- Floor Rate
Code on Wages (Haryana) Rules, 2021 does not provide for the provisions for fixing of floor rate as it is to be determined by the Centre.
- Haryana State Advisory Board and other Committees
The constitution of the Board and Committees, terms of office of officials and procedure of the operations of the Board and committees is provided under Chapter V of the Rules.
The provisions for Minimum Wages, Time Interval for revision of dearness allowance Number of hours of work in a normal working day, Weekly day of rest, , Payment of Wages, Payment of Bonus, Payment of Dues, Claims etc, Registers and Pay Slips, under Code on Wages (Haryana) Rules, 2021 are similar to the provisions stated under Code on Wages (Central) Rules covered under the 1st part of the article.
Uttar Pradesh
The Labour Department of Uttar Pradesh issued Draft Uttar Pradesh Code on Wages Rules, 2021 on 25.02.2021 for operating under Code of Wages, 2019.
- Applicability
The rules shall be applicable to the whole of the State of Uttar Pradesh and shall come into force on the date of their final publication in the Official Gazette.
- Floor Rate
Uttar Pradesh Code on Wages Rules, 2021 does not provide for the provisions for fixing of floor rate as it is to be determined by the Centre.
- Payment of Bonus
Uttar Pradesh Code on Wages Rules, 2021 does not provide for the provisions for payment of bonus, thus it can be interpreted that it shall adopt the provisions from to be determined by the Code on Wages (Central), Rules.
- Time Interval for revision of dearness allowance
Uttar Pradesh Code on Wages Rules, 2021 does not provide for the provisions for the time interval for revision of dearness allowance, thus it can be interpreted that it shall adopt the provisions from to be determined by the Code on Wages (Central), Rules.
- State Advisory Board,
The constitution of the Board and Committees, terms of office of officials and procedure of the operations of the Board and committees is provided under Chapter IV of the Rules.
The provisions for Minimum Wages, Number of hours of work in a normal working day, Weekly day of rest, , Payment of Wages, Payment of Dues, Claims etc, Registers and Pay Slips, under Uttar Pradesh Code on Wages Rules, 2021 are similar to the provisions stated under Code on Wages (Central) Rules covered under the 1st part of the article.
Telangana
The Labour Department of Telangana issued Draft Telangana Code on Wages Rules, 2021 on 29.09.2021 for operating under Code of Wages, 2019.
- Applicability
The rules shall be applicable to the whole of the State of Telangana and shall come into force on the date of their final publication in the Official Gazette.
- Revision of Wages
The State Government shall review or revise Minimum rates of wages under notified scheduled employments, ordinarily at an interval not exceeding five years.
- Floor Rate
The State Government shall consider National Floor Wage fixed by the Central Government from time to time. The State Government shall consider different floor wages for fixation of minimum rates of wages to the scheduled employments for different geographical areas.
- Payment of full wages in case of working for less than requisite working hours
Section 10 of Code of Wages 2019 provides that if an employee is employed for less than requisite working hours for a work for which minimum wages has been fixed under the Code, he shall be paid for full day as if he had worked for a full normal working day.
No provision regarding this has been provided under Code on Wages (Central) Rules but Telangana Code on Wages Rules, 2021 provides that such payment shall not be made in case the employee is not entitled to receive such wage under any other law.
- Equal Remuneration
For the purpose of resolution of disputes as to whether a work is of same or similar nature the State Government appoints the Authority as stated. The Authority shall consist of the following:
(i) Joint Commissioner of Labour (Head Office);
(ii) Joint Commissioner of Labour of Zone concerned;
(iii) Deputy Commissioner of the Labour of the District concerned; and
(iv) Assistant Commissioner of Labour area concerned.
The Appellate Authority against the orders of the above Authority is the Commissioner of Labour
- State Advisory Board,
The constitution of the Board and Committees, terms of office of officials and procedure of the operations of the Board and committees is provided under Chapter VI of the Rules.
The provisions for Minimum Wages, Time Interval for revision of dearness allowance, Number of hours of work in a normal working day, Weekly day of rest, Payment of Wages, Payment of Bonus, Payment of Dues, Claims etc, Registers and Pay Slips, under Telangana Code on Wages Rules, 2021 are similar to the provisions stated under Code on Wages (Central) Rules covered under the 1st part of the article.
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