Highlights of Code of Wages, 2019

The Code on Wages, 2019 has replaced previous laws namely The Payment of Wages Act, 1936, The Minimum Wages Act, 1948, The Payment of Bonus Act, 1965 and The Equal Remuneration Act, 1976. Now the main features of this new code are as follows:

Definition of wages:  

The Code seeks to provide a single uniform definition of ‘wages’ as applicable to minimum wages, payment of wages and payment of bonus[1].

Separate definitions of ‘worker’ and ’employee’:

The definition of ’employee’ is broader than that of ‘worker’ as it includes persons carrying out managerial and administrative work. The definition of ‘worker,’ however, expressly includes working journalists and sales promotion employees[2].

Equal Remuneration:

Consistent with the Equal Remuneration Act, the Code, inter-alia, includes provisions prohibiting discrimination on grounds of gender (i) with respect to wages by employers, with respect to same work or work of a similar nature done by employees and (ii) with respect to recruitment of employees for same work or work of a similar nature[3].

Changes with respect to minimum wages:

The Code introduces the concept of a floor wage, which is to be determined by the Central Government after taking into account the minimum living standards of workers in a manner to be prescribed, which may be different for different geographical areas. The appropriate Government can, under no circumstance, fix a minimum wage rate which is lower than the floor rate determined by the Central Government[4].

Provisions relating to period and payment of wages:

The Code has provided express provisions for the employer to fix the wage period for the employees on a daily, weekly, fortnightly or monthly basis, and stipulates the time limits for payments by the employer under each of such wage periods[5].

Changes with respect to payment of bonus: The Code lists disqualifications for receiving bonus along the lines of the Payment of Bonus Act. However, it is to be noted that the Code additionally provides that dismissal from service due to conviction for sexual harassment would also be considered as a ground for disqualification for receipt of bonus under the Code[6].


[1] Clause 2(y) of the Code on Wages, 2019

[2] The term ‘worker’ has been defined under Clause 2(z) and the term ’employee’ has been defined under Clause 2(k) of the Code on Wages, 2019

[3] Clause 3 of Code on Wages, 2019

[4] Clause 9 of the Code on Wages, 2019

[5] Clause 17 of the Code on Wages, 2019

[6] Clause 29(d) of the Code on Wages, 2019

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