Code of Wages Bill 2019- A Brief

  Underlined are the changes

Minimum Wages Act, 1948

 Applicability:

? Minimum wages are fixed for scheduled employments with more than 1000 employees as per section 2(1A) of the Act.

? No such ceiling about number of employees, Applicable to all including Wage Act

organised an unorganised sector employees.

Wages:

? Section 2(b) of the Act defining ‘wages includes house rent allowance.

? Section 2(y) excluding house rent allowance in the definition of ‘wages’ but section 7

states an allowance to be adjusted with basic rate of wages.

Period/Revision of Minimum Wages:

? Minimum wages must be revised by the Central or State governments at least once in

every 5 Years.

? The Code on Wages Act also provides that minimum wages be revised in 5-year

intervals.

National Minimum Wages:

? No such reference

? The Central Govt. may set a National Minimum Wage and may set different national

minimum wages for different States and regions. State governments cannot fix their

minimum wages less than national minimum wage.

Over Time Wages :

? Allows the relevant Central or State Governments to set Over Time wage.

? Sets Over Time Wage at two times the normal wage.

Claim for wages:

? Section 20 of the Act provided that any claim for wages could be made within 6 months.

? Section 45(6) that the claim could be made within 3 years.

Penalties

? Minimum Wages Offences include (i) paying employees less than minimum wages, and

(ii) not providing for a day of rest in the week. Penalties include fine upto Rs.500/- and

imprisonment upto six months.

? Employers who pay less than what is due under the Code will pay a fine of upto

Rs.50,000/-.

? If an employer is guilty of repeat offence within five years, penalties include

imprisonment upto three months or a fine of up to Rs.1 lakh or both.

Payment of Wages Act, 1936

Applicability to employees:

? Applies to employees whose wages do not exceed Rs.24000/- per month (effective from

1.10.2017).

? The payment of wages will apply to all the employees of establishment.

Final payment time Limit:

? Payment of Two days limit to pay full & final to worker in case of dismissal or

retrenchment. Not applicable in case of resignation.

? Added the condition of resignation.

Penalties

? Offences include (i) nonpayment of wages at specified time period, (ii) unauthorized

deductions from wages. Penalties include fine upto Rs.7500.

? Employers who pay less than what is due under the Code will pay a fine of upto

Rs.50,000/-.

? If an employer is guilty of repeat offence within five years, penalties include

imprisonment up to three months or a fine of up to Rs.1 lakh or both.

Payment of Bonus Act,1965

Applicability

? Applied to employments with 20 or more persons and for employees whose wages do

not exceed Rs.21000/- per month w.e.f. 2014.

? Bonus will be payable to employees whose wages do not exceed a monthly amount

which will be notified by appropriate Government.

 Employer

? No such provision in payment of bonus act and wages act.

? In case of factory occupier or manager and . in case of other establishment, person

having ultimate control has been deemed as employer in respect of direct and

contract labour. For the purpose of bonus now employer will be responsible in respect

of bonus for contract labour.

Disqualification Payment of Bonus

? No such provision in case of conviction for sexual harassment conditions.

? Added apart from other existing 3.

Penalties

? In case a person or company does not comply with the Act, they can be punished with

imprisonment up to six months or fine upto Rs. 1000/-.

? Employers who do not comply with any other provision of the Code will pay a fine of

up to Rs. 20000/-.

? If an employer is guilty of the same offence again within five years, penalties incl.

imprisonment up to one month or a fine of upto Rs.40,000 or both.

Equal Remuneration Act, 1976

Gender discrimination

? Prohibits gender discrimination in wage payment.

? Prohibits gender discrimination in matters related to wages and recruitment of

employees for the same work or work of similar nature.

? Work of similar nature is defined as work for which the skill, effort, experience, and

responsibility required are the same.

? Prohibits gender discrimination in recruitment, transfers and promotions.

? No such provision

Penalties

? Offences include: (i) non maintenance of documents in relation to employees, and (ii)

discrimination against women in recruitment. Penalties include fine up to Rs.20000/- or

imprisonment upto 1year.

? Employers who do not comply with any other provision of the Code will pay a fine of

up toRs. 20000/-.

? If an employer is guilty of the same offence again within five years, penalties incl.

imprisonment up to one month or a fine of upto Rs.40,000 or both.

Definitions Contract Labour under MW Act, PW Act, PoB Act

? No such definition.

? Excludes regular employees of contractor for his establishment and getting annual

increase and social benefits.

Wages

? Different definition of wages under MW, PW & PoB Acts.

? Excludes many allowances. But if allowance are more than 50% of remuneration,

amount in excess of 50% of allowances will be deemed as wages.

Inspections of all the above acts:

? Inspectors/facilitators are appointed to carry out (i) surprise checks and (ii)examine

persons and require them to give information, among other Powers.

? Appointment of a Inspector-cum-Facilitator to carry out inspections and provide

information to employer and employees for better compliance Inspection will be done

on the basis of an inspection scheme which will include a web based inspection

schedule.

? The inspection schemes will be decided by the Central Government.