Summary: The Code on Wages, 2019 consolidates four key wage-related statutes into a single, unified framework, aiming to simplify compliance and ensure fair treatment for all employees. It covers three primary areas: minimum wage, timely payments, and equal remuneration. The new code extends minimum wage protections to all employees, moving away from the fragmented, state-specific system of the past and introducing a national floor wage. It also incorporates factors like skill level and geographic location when setting wages. Regarding timely payment, the Code removes previous wage limits and mandates strict deadlines for monthly, weekly, and daily wage disbursements, including electronic payments. The Code also strengthens the principle of equal pay for equal work, expanding protections against gender-based wage discrimination and simplifying enforcement. While the Code on Wages modernizes and streamlines India’s labour laws, its success will depend on effective implementation, employer adherence, and efficient grievance resolution.
INTRODUCTION
The Code on Wages, 2019 signifies a significant change in India’s labour law landscape. By merging four key wage-related statutes into a unified code, the legislation aims to streamline compliance and guarantee fair treatment for all employees. This blog provides a comparative analysis of the new Code and the former laws, concentrating on three main areas: Minimum Wage, Timely Payment, and Equal Remuneration.
1. Minimum Wage: Universalization and Fair Compensation Previous Framework:
Previously, minimum wage regulations were largely governed by the Minimum Wages Act of 1948, which only applied to scheduled employments. Individual states set sector-specific wage rates, often causing fragmentation and inconsistencies.
Under the Code on Wages, 2019:
- Universal Coverage: The Code encompasses all employees, regardless of their industry or wage limits.
- Floor Wage Concept: The Central Government has the authority to establish a national floor wage, below which no state can set minimum wages.
- Scientific Criteria: Considerations such as skill levels and geographic locations are now considered for determining wages.
Impact: A more inclusive and transparent framework that guarantees a minimum living standard for all workers.
2. Timely Wage Payments: Promoting Consistency Previous Framework:
The Payment of Wages Act, 1936 governed the punctuality of wage disbursements. However, its reach was restricted to employees with earnings below a certain wage limit, excluding many from its protections.
Under the Code on Wages, 2019:
- Expanded Scope: The Code encompasses all employees, doing away with wage limits.
- Established Deadlines:
- Monthly: By the 7th day of the following month
- Weekly: On the final working day of the week
- Daily: At the conclusion of each shift
- Electronic Payments Permitted: Reflecting current financial practices
Impact: Boosts financial stability and security for workers by guaranteeing timely payments.
3. Equal Pay: Enhancing Equity Previous Framework:
The Equal Remuneration Act of 1976 prohibited gender-based wage discrimination.
Nevertheless, challenges in enforcement and ambiguous definitions restricted its effectiveness.
According to the Code on Wages, 2019:
- Non-Discrimination Principle: Strengthens the concept of equal compensation for equal work, irrespective of gender.
- Broadened Protections: Covers both hiring practices and wage setting.
- Easier Compliance: Merging into a single code enhances clarity and eases enforcement.
Impact: Advances gender equity in the workplace and addresses systemic wage disparities.
CONCLUSION
The Code on Wages, 2019 represents a major advancement in the modernization of India’s labour laws by establishing a streamlined, universal, and clear wage system. Its focus on inclusivity, prompt payment, and non-discrimination demonstrates the changing demands of a dynamic workforce. Nonetheless, effective execution relies on awareness, efficient grievance resolution processes, and adherence by employers.
REFERENCES
- The Code on Wages, 2019
- Minimum Wages Act, 1948
- Payment of Wages Act, 1936
- Equal Remuneration Act, 1976
- Ministry of Labour and Employment Notifications
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