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TMI BlogTHE CODE ON WAGES, 2019 – PART IX X X X Extracts X X X X X X X X Extracts X X X X ..... THE CODE ON WAGES, 2019 – PART I - By: - Mr. M. GOVINDARAJAN - Other Topics - Dated:- 17-8-2019 - - Introduction The Central Government has enacted the Code on Wages, 2019 ( Code for short) to amend and consolidate the laws relating to wages and payment of bonus. The Code repealed the following Acts- The Payment of Wages Act, 1936; The Minimum Wages Act,1948; The Payment of Bonus Act, 1965; and The Equal Remuneration Act, 1976. The Code extends to the whole of India. Effective date The President of India gave his assent to this Code on 08.08.2019 and the Code has been published in the Official Gazette on 08.08.2019 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tself. However the provisions of this Code have not come into effect on the date of notification of the Code in the Official Gazette. Section 1(3) of the Code provides that the Code 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 and any reference in any such provision to the commencement of this Code shall be construed as a reference to the coming into the force of that provision. Wages The term wage is defined under section 2(y) of the Code as all remuneration whether by way of salaries, allowances or otherwise, expressed in terms of money or capable of being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so expressed which would, if the terms of employment, express or implied, were fulfilled, be payable to a person employed in respect of his employment or of work done in such employment, and includes- basic pay; dearness allowance; and retaining allowance, if any, but does not include- any bonus payable under any law for the time being in force, which does not form part of the remuneration payable under the terms of employment; the value of any house accommodation, or of the supply of light, water, medical attendance or other amenity or any service excluded from the computation of wages by a general or special order of the appropriate Government; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any contribution paid by the Government employer to any person or provident fund, and the interest which may have accrued thereon; any conveyance allowance or the value of any travelling concession; any sum paid to the employed person to defray special expenses entailed on him by the nature of his employment; house rent allowance; remuneration payable under any award or settlement between the parties or order of a Court or Tribunal; any overtime allowance; any commission payable to the employee; any gratuity payable on the termination of employment; any retrenchment compensation or other retirement benefit payable to the employee or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any ex-gratia payment made to him on the termination of employment; For calculating wages, if payments made by the employer to employee under (a) to (i) as above exceeds one half or such other percent as may be notified by the Central Government, of the all remuneration calculated, the amount which exceeds such one half or such other percent so notified, shall be deemed as remuneration and shall be accorded in wages. For the purposes of equal wages to all genders and for payment of wages, the emoluments specified in (d), (f), (g) and (h) shall be taken for computation of wage. Deemed wages Where an employee is given in lieu of the whole or part of the wages payable to him, any remuneration in ki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd by his employer, the value of such remuneration in kind which does not exceed 15% of the total wages payable to him, shall be deemed to part of the wage of such employee. Discrimination in wages There shall be no discrimination among the employees on the ground of gender in respect of wages by the same employer in respect o the same work or work of a similar nature done by an employee. The expression same work or work of a similar nature is defined under section 2(v) of the Code as work in respect of which the skill, effort, experience and responsibility required are the same, when performed under similar working conditions by employees and the difference, if any, between the skill, effort a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd experience and responsibility required for employees of any gender, are not of practical importance in relation to the terms and conditions of employment. The employer shall not reduce the wage for the purpose of solving the problem of discrimination in wages. The employer shall not make any discrimination on the ground of sex while recruiting any employee for the same work or work of similar nature and in the conditions of employment, except where the employment of women in such work is prohibited or restricted by or under any law for the time being in force. The dispute as to the work is of same or similar nature shall be decided by such authority as may be notified by the appropriate Government. Minimum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wage The employer shall pay to the employee that wages not less than the minimum fixed by the appropriate Government. The expression appropriate Government is defined under section 2(d) of the Code . The Code prescribes the Central Government and State Government as appropriate Government. The definition earmarks the area for the Central Government. The Central Government is the appropriate Government for the following- an establishment carried on or by or under the authority of the Central Government; or the establishment of railways, mines, oil field, major ports, air transport service, telecommunication, banking and insurance company; or a corporation established by a Centr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Act; or a Central public sector undertaking; or subsidiary company set up by central public sector undertakings; or autonomous body owned or controlled by the Central Government including establishment of contractors for the purposes of such establishment, corporation or other authority, central public sector undertakings, subsidiary companies or autonomous body. The State Government is the appropriate Government in relation to another establishment. Fixing floor wage Section 9 of the Code provides that the Central Government shall fix the floor wage taking into account of the minimum living standards of a worker. The Central Government may fix differe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt floor wage for different geographical location. The Central Government may, before fixing the floor wage, obtain the advice of the Central Advisory Board and consult the State Governments. Fixation of minimum wages Section 6 of the Code provides for the fixation of minimum wages by the appropriate Government. The said Government shall fix the minimum wages not less than the floor wages fixed by the Central Government. If the minimum wages fixed by the appropriate Government, earlier, is more than the floor wage, then such Government shall not reduce the minimum rate of wages fixed earlier. Types of minimum wages The minimum wages may be fixed for the time work or piece work. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In cases the employees are employed on piece work, the appropriate Government shall fix a minimum rate of wages for securing such employees a minimum rate of wages on a time work basis. The wages for time work may be fixed in accordance with any one or more of the following wage periods- by the hour; or by the day; or by the month Components of minimum wages The minimum wages may consist of the following- a basic rate of wages and an allowance at a rate to be adjusted, at such intervals and in such manner as the appropriate Government may direct, to accord as nearly as practicable with the variation of the cost of living index applicabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to such workers (cost of living allowance); or a basic rate of wages with or without the cost of living allowance and the cash value and the concessions in respect of supplies of essential commodities or concession rates, where so authorized; or an all inclusive rate allowing for the basic rate, the cost of living allowance and the cash value of the concessions, if any; Consideration by the appropriate Government The appropriate Government, while fixing the minimum wages- shall primarily take into account the skill of workers required for working under the categories of unskilled, skilled, semi-skilled and highly skilled or geographical area or both; and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may in addition to such minimum rate of wages for certain category of workers, take into account their arduousness of work like temperature or humidity normally difficult to bear, hazardous occupations or process or underground work as may be prescribed by that Government; and the norms of such fixation of minimum rate of wages shall be such as may be prescribed. Procedure The appropriate Government, while fixing minimum rate of wages for the first time or in revising minimum rates of wages, shall- appoint as many committees as may consider necessary to hold enquiries and recommend for such fixation or revision of wage; publish its proposals, by notification, for the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nformation of persons likely to be affected thereby and specify a date not less than 2 months from the date of notification on which the proposals shall be taken into consideration. Every committee appointed by the appropriate Government shall consist of persons- representing employers; representing employees which shall be equal in number of the members; independent persons not exceeding one third of the total members of the committee. The committee shall submit its reports to the appropriate Government. On receipt of such recommendations the appropriate Government shall consider the same and also the representations received by it and fix the minimum wages or revise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the minimum wages and notify the same. Unless otherwise provided the minimum wages so fixed shall come into effect on the expiry of three months from the date of issue of the notification. The appropriate Government may consult the Advisory Board in this regard. Review by the appropriate Government The appropriate Government shall review or revise minimum wage rates of wages ordinarily at the interval not exceeding 5 years. Wages for lesser working hours If the employee is employed for a period less than the requisite number of hours constituting a normal working day, he shall be entitled to receive wages in respect of work done on that day, as if he had worked for a full normal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... working day. However he shall not be entitled to receive for a full normal working day- where his failure to work is caused by his unwillingness to work and not by the omission of the employer to provide him with the work; and in such other cases and circumstances as may be prescribed. Wages for two or more classes of work Where an employee does two or more classes of work to each of which a different minimum rate of wages is applicable, the employer shall pay to such employee in respect of the time respectively occupied in each such class of work, wages at not less than the minimum rate in force in respect of each such class. Minimum time rate wages for piece work ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Where a person is employed on piece work for which minimum time rate and not a minimum piece rate has been fixed under this Code, the employer shall pay to such person wages at not less than the minimum time rate. Fixing hours of work The appropriate Government, while fixing the minimum rate of wages, may- fix the number of hours of work which shall constitute a normal working day inclusive of one or more specified intervals; provide for a day of rest in every period of 7 days which shall be allowed to all employees or to any specified class of employees and for the payment of remuneration in respect of such days of rest. Provide for payment of a work on a da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of rest not less than the overtime rate. The above shall be applicable to the following employees to such extent and subject to conditions as may be prescribed- employees engaged in emergency which could not have been foreseen or prevented; employees worked in the nature of preparatory or complimentary work which must necessarily be carried on outside limits laid down for the general working in the employment concerned; employees whose employment is essentially intermittent; employees engaged in any work which for technical reasons has to be completed before the duty is over; and employees engaged in a work which could not be carried on except at times depe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent on the irregular action of the natural forces. Overtime wage Where the employee works on any day in excess of the number of hours constituting a normal working day, the employer shall pay him for every for every hour or part of an hour so worked in excess, at the overtime rate which shall not be less than twice the normal rate of wages. - - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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