The Legislative Department of the Ministry of Law and Justice has published the Code on Wages, 2019 (“Code”) on 8th August 2019 for general information. On the same date of publication, the Code has received assent of the President. The Code intends to amend and consolidate the laws relating to wages and bonus and matters connected or incidental to it.
It shall come into force on such date as the Central Government may by notification in the Official Gazette appoint and different dates may be appointed for different provisions of this Code.
The Code intends to repeal the Payment of Wages Act, 1936, the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965 and the Equal Remuneration Act, 1976. All the legalities under these four Acts will now be governed by the proposed Code. The appropriate Government is supposed to make rules for carrying out the provisions of this Code.
As per the proposed new Code in simple language, Central Government will be the appropriate Government for an establishment carried on by or under the authority of the Central Government, railways, mines, oil field, major ports, air transport service, telecommunication, banking, and the insurance company. Now for the remaining establishments, the State Government will be the appropriate Government.
Some of the key features of the Code are: –
- Establishment within the Code means any place where any industry, trade, business, manufacture or occupation is carried on and includes a Government establishment (factory has the same meaning as defined under Factories Act, 1948);
- Bonus is made applicable to establishments in which twenty or more persons are employed or were employed on any day during an accounting year (excluding from its applicability universities, educational institutions, hospitals, chamber of commerce, social welfare institutions established not for purposes of profit, department of the Central Government or a State Government or a local authority etc as enlisted under Section 41);
- Wages shall be paid in current coin or currency notes or by cheque or by crediting the wages in the bank account of the employee or by the electronic mode;
- Wage period for employees could be either as daily or weekly or fortnightly or monthly provided that no wage period shall be more than a month, further employer shall pay or cause to be paid wages to the employees in case of:
- daily basis, at the end of the shift,
- weekly basis, on the last working day of the week, before the weekly holiday,
- fortnightly basis, before the end of the second day after the end of the fortnight, and
- monthly basis, before the expiry of the seventh day of the succeeding month,
- Any contract or agreement where an employee relinquishes any right due to him shall be null and void so far as it purports to remove or reduce the liability of any person to pay such amount under this Code;
- Appointment of Inspector-cum-Facilitators who shall exercise the powers conferred on them throughout the State or specified geographical limits, who shall advise to employers & workers relating to compliance and inspect the establishments;
- In case of a company every person who, during the commission of any offense was in charge of, and was responsible to the company for the conduct of the business of the company shall be deemed to be guilty of the offense and shall be liable to be proceeded against and punished accordingly;
- Non-maintenance or improper maintenance of records in the establishment will attract fine which may extend to Rs. 10,000/-;
- Contravention of any provision of Code with no specific penalty or any rule or order shall attract fine which may extend to Rs. 20,000/.