SUMMARY OF LABOUR CODES: -

SUMMARY OF CODE ON WAGES –

CHAPTER 3
PAYMENT OF WAGES:-

- As per the Chapter 3 Payment of Wages under Code on Wages 2019,

Main Objectives:-
-The main objective of the Payment of Wages Code is to avoid unnecessary delay in the
payment of wages and to prevent unauthorized deductions from the wages and arbitrary fines
Applicability:-
Every person employed in any factory, upon any railway or through sub-contractor in a railway
and a person employed in an industrial or other establishment.
Provision relating to timely payment of wages to employees:-

As per the provisions under Payment of Wages Code wages needs to be paid-

 Before the expiry of the 7th day after the last day of the wage period, where there are
less than 1000 workers employed and in rest case on the 10th day;
 In current coin or currency notes and by cheques or by crediting the wages in the
employee’s bank account after obtaining his written authority;
 On a working day;
Before the expiry of the second day, to the person whose employment is terminated.
Responsibility of the employer towards payment of wages to employee: -

Every employer shall be responsible for the payment of all wages required to be paid under the
Payment of Wages Code to persons employed by him and in case of persons employed-

 In the case of contractor, a person designated by such contractor who is directly under
his charge.
 A person designated by the employer as a person responsible for complying with the
provisions of the code.
Procedure and provisions relating to fine deduction from the pay: -

In case of fines that need to be imposed on the employee it should only be for the acts and
omissions that are mentioned in the list of which has been approved by the appropriate
Government. Fines should not exceed 3% of the wages in a month. This needs to be recovered
within 90 days of the date of act or omission, be imposed after a proper show cause procedure
and cannot be imposed on an employee of less than 15 years of age.
Employers have compulsorily to maintain following registers in the prescribed forms-

 Register of wages;
 Register of fines;
 Register of deduction for damages or loss
 Register of advances.

- Deductions that can be made on pay:-

The following mentioned are the main deductions that are allowed under the Payment of
Wages Code:

 Fines
 Deduction for the actual period of absence
 Deduction for the damage or loss of goods expressly entrusted to the employed person;
 Deduction for house accommodation;
 Deduction for the amenities and service supplied by employer with agreement to the
employee;
 Deduction for recovery of advances and interest, and adjustment of overpayment;
 Deductions for recovery of loans from any fund constituted for the welfare of labour as
agreed between employer and employee;
 Deduction for income tax;
 Deduction on orders of a court or other authority
 Deduction for subscription and repayment of advance from any Provident Fund;
 Deduction for payments to cooperative societies as agreed between employer and
employee;
 Deduction of premium for LIC policy on written authorization of the employed person;
or any other investment for Post Office Saving Schemes
However, the total amount of deductions should not exceed 75% of wages of the employee in
any wage period if whole or part of the deductions is meant for the payments to cooperative
societies. In other cases, it should not exceed 50%.
CHAPTER 2
MINIMUM WAGES:-
As per the chapter 2 Minimum Wages under Code on Wages 2019,
Applicability:-

 The minimum wages decided by the central or state governments must be higher than
the floor wage. In case the existing minimum wages fixed by the central or state
governments are higher than the floor wage, they cannot reduce the minimum wages.

 The minimum rate of wages may consist of a basic rate of wages and a cost of
living allowance; or a basic rate of wages, with or without the cost of living
allowance, and the cash value of concessions in respect of the supply of essential
commodities at concession rates (if 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).

Fixation of Minimum Wages:-

 While fixing or revising minimum rates of wages, different minimum rates of

wages may be fixed for different scheduled employments; different classes of
work in the same scheduled employment; adults, adolescents, children and
apprentices; and different localities. The minimum wage rates may be fixed by
hour, day, month or any such other larger wage period as may be prescribed.

 The Code prohibits employers from paying wages less than the minimum wages. 
Minimum wages will be notified by the central or state governments.  This will be based
on time, or number of pieces produced.  The minimum wages will be revised and
reviewed by the central or state governments at an interval of not more than five years. 
While fixing minimum wages, the central or state governments may take into account
factors such as:

 Skill of workers, and

 Difficulty of work. 

Components of Minimum Wages:-

 The minimum wages must be revised every five years and the same has to be
announced every six months.
 If an employee whose minimum rate of wages has been fixed under this Code by the
day works on any day on which he was employed for a period of less than the requisite
 number of hours constituting a normal working day, he shall, save as otherwise
hereinafter provided, be entitled to receive wages in respect of work done on that day,
as if he had worked for a full normal working day.
 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.
 If 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.
 The Code provides that in case an employee works on any day in excess of the number
of hours constituting a normal working day, the employer is to pay him for every hour or
for part of an hour so worked in excess, at the overtime rate which should not be less
than twice the normal rate of wages.

CHAPTER 4
PAYMENT OF BONUS:-
As per the chapter 4 Payment of Bonus under Code on Wages 2019,
Objectives
The objectives o are as follows:

 To impose a legal responsibility upon the employer of every establishment covered by

the Code to pay the bonus to employees.
 To designate the minimum and maximum percentage of bonus.
 Objectives of the Act
 The objectives of the Bonus Act (Payment of bonus Act) are as follows:
 To impose a legal responsibility upon the employer of every establishment covered by
the Act to pay the bonus to employees.
 To designate the minimum and maximum percentage of bonus.
 To prescribe the formula for calculating bonus.
 To provide redressal mechanism.

Applicability:-
The Payment of Bonus implements to the establishments which fall under any of the below
listed:
  It applies to any factory or establishment which had twenty or more workers employed
on any day during the year.
 The act does not apply to the non-profit making organisations.
 It is not applicable to establishments such as LIC, hospitals which are excluded under
Section 32.
 It is not applicable to establishments where employees have signed an agreement with
the employer.
 It is not applicable to establishments exempted by the appropriate government like sick
units

Departments, Undertakings and Branches:-

 According to this, any different departments or undertakings or branches of an

establishment of whether located in the same place or at different areas should be
considered as parts of the similar establishment for computation of bonus under the
Act.
 A separate balance sheet regarding profit and loss of the establishment in the year had
to be prepared and maintained concerning such department or undertaking, or branch
should be treated as a separate establishment for computation of bonus for the year.

Eligibility for Bonus

Any employee is eligible for availing bonus if the following conditions are satisfied:

 The employee engaged in any work whether skilled, unskilled, managerial, supervisory
etc.
 The employee who have worked not less than 30 working days in the same year.

Disqualification of Bonus

 The employees cannot avail the bonus if any action taken by the management in case of
dishonesty, theft, sabotage of any property of establishment, violent behaviour while on
the duty within premises of the establishment and for conviction for sexual harassment.

Timeline for Payment of Bonus

 The payment of bonus should be paid in cash within eight months from the end of the
accounting year or within a month from the date of enforcement of the act.
Payment of Minimum and Maximum Bonus

 The minimum bonus will be 8.33% of the salary during the year.
 The maximum bonus is 20% of the salary during the accounting year.

Duties of the Employer

The following duties to be carried out by the employer:

 To estimate and pay the annual bonus as required.

 To maintain the following registers:
 The register should show the computation of allocating surplus in respective Form.
 The register should be maintained with the payment of the bonus to the employees.
 The records should be maintained before inspection and such other information should
be stored.
Rights of Employers
The following rights to be claimed out by the employers:

 Right to notice any disputes relating to application or interpretation of any provision of

the Payment of Bonus, to the Labour Court or Labour Tribunal.
 Right to make a valid deduction from the bonus due to an employee, such as festival
bonus paid and financial loss created by the misbehaviour of the workers.
 Right to take the bonus of an employee, who has been dismissed from service for
misbehaviour, violent behaviour, fraud, misappropriation or sabotage of any property of
the establishment.
SUMMARY OF CODE ON OCCUPATIONAL SAFETY AND HEALTH
AND WORKING CONDITIONS CODE - 2020
CHAPTER 9
SPECIAL PROVISIONS FOR CONTRACT LABOUR AND INTER-STATE MIGRANT WORKER, ETC.

PART 1:-
Contract Labour:-
Applicability of this Part:-

 Every establishment in which fifty or more contract labour are employed or were
employed on any day of the preceding twelve months through contract

 Every manpower supply contractor who has employed, on any day of the preceding
twelve months, fifty or more contract labour.

 This Part shall not apply to the establishment in which work only of an intermittent or
casual nature is performed.

Appointment of designated authority

 The appropriate Government may appoint Gazetted officers of the Government, and
specify the limits of their jurisdiction and vest with such powers and duties including
dealing with issuance and revocation of licences electronically as may be specified
therein.
Procedure for Grant 0f License

 The contractor has to request the Licensing Authority along with the application for the
grant of a license in Form no.
 The receipt of the fee paid to the licensing officer has to be retained.
 A certificate by the employer in Form stating that he has employed the concerned
contractor for his establishment.
 The licensing officer may make further necessary investigations and grant the license in
Form, which has to be renewed before 30 days of the expiry date along with the
prescribed fee, failing which the contractor will have to pay 25% more fee than the
ordinary amount.
No fees or commission any cost to workers.

 The contractor shall not charge directly or indirectly, in whole or in part, any fee or
commission from the contract labour.

Responsibility for payment of wages.

 A contractor shall be responsible for payment of wages to each contract labour

employed by him and such wages shall be paid before the expiry of such period as may
be prescribed by the appropriate Government.
 Every contractor shall, make the disbursement of wages through bank transfer or
electronic mode and inform the principal employer electronically the amount so paid by
such mode.
 In case the contractor fails to make payment of wages within the prescribed period or
makes short payment, then, the principal employer shall be liable to make payment of
the wages in full or the unpaid balance due, as the case may be, to the concerned
contract labour employed by the contractor and recover the amount so paid from the
contractor either by deduction from any amount payable to the contractor under any
contract or as a debt payable by the contractor.
 The appropriate Government, in the event the contractor does not pay the wages to the
contract labour employed by him, shall pass the orders of making payment of such
wages from the amount deposited by such contractor as security deposit under the
licence issued by the licensing officer to the contractor, in such manner as may be
prescribed by such Government.

Prohibition of employment of contract labour.

 Employment of contract labour in core activities of any establishment is prohibited.

Power to exempt in special cases.

 The appropriate Government may, in the case of an emergency, direct, by notification,

that subject to such conditions and restrictions, if any, all or any of the provisions of this
Code or the rules made thereunder shall not apply to any establishment or class of
establishments or any class of contractors.
PART 2:-
INTER-STATE MIGRANT WORKERS
Applicability

 This Part shall apply to every establishment in which ten or more inter-State migrant
workers are employed or were employed on any day of the preceding twelve months

Facilities to inter-State migrant workers.

 to ensure suitable conditions of work to such worker having regard to the fact that he is
required to work in a State different from his own State
 In case of fatal accident or serious bodily injury to any such worker, to report to the
specified authorities of both the States and also the next of kin of the worker;
 To extend all benefits to such worker which are available to a worker of that
establishment including benefits under the Employees’ State Insurance Act, 1948 or the
Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 or any other law
for the time being in force and the facility of medical check-up as available to a worker .
Duties of Employers

 Journey allowance, the employer shall pay, to every inter-State migrant worker
employed in his establishment, in a year a lump sum amount of fare for to and
fro journey to his native place from the place of his employment.

PART 3:-
AUDIO-VISUAL WORKERS
Prohibition of employment of audio-visual worker without agreement.

No person shall be employed as an audio-visual worker in or in connection with production of

any audio-visual programme unless,—

 An agreement in writing is entered into.

 Such agreement is registered with the competent authority, to be notified by the
appropriate Government, by the producer of such audio-visual programme.
 Every agreement, shall be in the prescribed form.
PART 4
MINES
Components:-
Appointment of Managers.

 Every mine shall be under a sole manager who shall have such qualifications as may be
prescribed by the Central Government and the owner or agent of every mine shall
appoint a person having such qualifications to be the manager.
Employment of persons below eighteen years of age.

 No person below eighteen years of age shall be allowed to work in any mine.
Establishment, maintenance of rescue services and vocational training.

 The Central Government may prescribe vocational training and rescue and recovery
services for persons employed in a mine.

PART 5
BEEDI AND CIGAR WORKERS
Licence to industrial premises and person.

 No employer shall use or allow to use any place or premises as an industrial premises
unless he holds a valid licence issued.
 Licence granted under the said section for the purposes of this section shall be valid for
five years and may be renewed thereafter.
 An application for the renewal of a licence for the purposes of this Part shall be made at
least thirty days before the expiry of the period
Appeals

 Any person aggrieved by the decision of the authority refusing to grant or renew a
licence, or cancelling or suspending a licence, relating to this Part may, within such time
and on payment of such fees as may be prescribed, appeal to the appellate authority
and such authority may by order confirm, modify or reverse any order refusing to grant
or renew a licence, or cancelling or suspending a licence, relating to this part.
Permission to work by employees outside industrial premises.

 The State Government may permit the wetting or cutting of beedi or tobacco leaves by
employees outside the industrial premises on an application made to it by the employer
on behalf of such employees, subject to such conditions as may be prescribed.
 The employer shall maintain the record of the work permitted to be carried on outside
the industrial premises, in such form as may be prescribed.
 No employer shall require or allow any manufacturing process connected with the
making of beedi or cigar or both to be carried on outside the industrial premises.
 Nothing contained in this Part shall apply to the owner or occupier of a private dwelling
house, not being an employee of an employer to whom this Part applies, who carries on
any manufacturing process in such private dwelling house with the assistance of the
members of his family living with him in such dwelling house and dependent on him.

PART 6
BUILDING OR OTHER CONSTRUCTION WORKERS
Prohibitions:-

 No person, about whom the employer knows or has reasons to believe that he is a deaf
or he has a defective vision or he has a tendency to giddiness, shall be required or
allowed to work in any such operation of building or other construction work which is
likely to involve a risk of any accident either to the building worker himself or to any
other person.

PART 7
FACTORIES
Approval and licensing of factories.
The appropriate Government may make rules in respect of factory or class or description of
factories for—
The submission of plans including specifications, nature and certification.
 The previous permission for the site on which the factory is to be situated and for the
construction or extension.
  Licensing and renewal thereof including fees to be payable for such, licensing and
renewal, if required, as the case may be.

 Where a State Government or a Chief Inspector-cum-Facilitator refuses to grant

permission to the site, construction or extension of a factory and licensing of a factory,
the applicant may within thirty days of the date of such refusal appeal to the Central
Government if the decision appealed from was of the State Government and to the
State Government in any other case.
Liability of owner of premises in certain circumstances.

 Any premises or separate buildings are leased to different occupiers for use as separate
factories, the owner of the premises and occupiers of the factories utilizing such
common facilities which include safety and fire prevention and protection, access,
hygiene, occupational health, ventilation, temperature, emergency preparedness and
response, canteens, shelter, rest rooms and crèches shall jointly and severally be
responsible for provision and maintenance of such common facilities and services as
may be prescribed by the appropriate Government.
Compulsory disclosure of information by occupier.

 Occupier of every factory involving a hazardous process shall disclose in the manner
prescribed by the State Government all information regarding dangers, including health
hazards and the measures to overcome such hazards arising from the exposure to or
handling of the materials or substances in the manufacture, transportation, storage and
other processes, to the workers employed in the factory, the Chief Inspector-cum-
Facilitator or Inspector-cum-Facilitator, the local authority within whose jurisdiction the
factory is situate and the general public in the vicinity.

 The occupier shall, at the time of registering the factory involving a hazardous process,
lay down a detailed policy with respect to the health and safety of the workers
employed therein and intimate such policy to the Chief Inspector-cum-Facilitator or
Inspector-cum-Facilitator and the local authority and, thereafter, at such intervals as
may be prescribed by the State Government, inform the Chief Inspector-cum-Facilitator
or Inspector-cum-Facilitator and the local authority of any change made in the said
policy.
Permissible limits of exposure of chemicals and toxic substances.
  The maximum permissible limits of exposure of chemical and toxic substances in
manufacturing process in any factory shall be of the value as may be prescribed by the
State Government.
Right of workers to warn about imminent danger.

 Workers employed in any factory engaged in a hazardous process have reasonable

apprehension that there is a likelihood of imminent danger to their lives or health due
to any accident, they may, bring the same to the notice of the occupier, agent, manager
or any other person who is in-charge of the factory or the process concerned directly or
through their representatives in the Safety Committee and simultaneously bring the
same to the notice of the Inspector-cum-Facilitator.
Power to make rules to exempt.

 The appropriate Government may make rules specifying the persons who hold positions
of supervision or management or are employed in a confidential position in a factory or
empowering the Chief Inspector-cum-Facilitator to declare any person, other than a
person so specified, as a person holding position of supervision or management or
employed in a confidential position in a factory if, in the opinion of the Chief Inspector-
cum-Facilitator, such person holds such position or is so employed, and the provisions of
this Code, shall not apply to any person so defined or declared.

PART 8
PLANTATION
Facilities for workers in plantation.

 Necessary housing accommodation including drinking water, kitchen and toilet to every
worker employed in the plantation (including his family).
 Crèches facilities where in the plantation 50 or more workers (including workers
employed by any contractor) are employed or were employed on any day of the
preceding 12 months.
 An employer of a plantation shall be responsible to provide and maintain welfare
facilities for which the workers in the plantation are entitled under this Code either from
his own resources or through the schemes of the Central Government or State
Government, Municipality or Panchayat for the locality in which the plantation is
situated.
Safety

 In every plantation, arrangement shall be made by the employer to provide for Safety.
 The safety of a worker in connection with the use, handling, storage and transport of
insecticides, pesticides and chemicals and toxic substances.

 The State Government may prescribe for special safeguards for employment of women
or adolescents in using or handling hazardous chemicals.
 The employer of a plantation shall appoint persons possessing the prescribed
qualifications to supervise the use, handling, storage and transportation of insecticides,
chemicals and toxic substances in his plantation.
 Every employer of a plantation shall ensure that every worker in plantation employed
for handling, mixing, blending and applying insecticides, chemicals and toxic substances,
is trained about the hazards involved in different operations in which he is engaged, the
various safety measures and safe work practices to be adopted in emergencies arising
from spillage of such insecticides, chemicals and toxic substances and such other
matters as may be prescribed by the State Government.
 Every worker in a plantation who is exposed to insecticides, pesticides, chemicals and
toxic substances shall be medically examined periodically, in such manner as may be
prescribed by the State Government.
 Every employer of a plantation shall maintain health record of every worker in
plantation who is exposed to insecticides, pesticides, chemicals and toxic substances
which are used, handled, stored or transported in a plantation, and every such worker
shall have access to such record.
 Every employer of a plantation shall provide—
(a) Washing, bathing and clock room facilities; and
(b) Protective clothing and equipment.
 To every worker engaged in the handling insecticides, pesticides, chemicals and toxic
substances in such manner as may be prescribed by the State Government.
 Every employer of a plantation shall display in the plantation, a list of permissible
concentrations of insecticides, pesticides, chemicals and toxic substances in the
breathing zone of the workers engaged in the handling and application of insecticides,
pesticides, chemicals and toxic substances in the plantation.
 Every employer of a plantation shall exhibit such precautionary notices in the plantation
as may be prescribed by the State Government indicating the hazards of insecticides,
pesticides, chemicals and toxic substances.
ADDITIONAL READING SUMMARY.
CHAPTER 1
IMPORTANT DEFINITIONS:-

 Appropriate Government: “appropriate Government” means concerning any scheduled

employment carried on by or under the authority of the Central Government or a
railway administration or concerning a mine, oil-field or major port, or any corporation
established by a Central Act, the Central Government, and concerning any other
scheduled employment, the State Government.
 Competent Authority: “competent authority” means the authority appointed by the
appropriate Government by notification in its Official Gazette to ascertain from time to
time the cost of living index number applicable to the employees employed in the
scheduled employments specified in such notification
 Cost of living index number: “cost of living index number” concerning employees in any
scheduled employment in respect of which minimum rates of wages have been fixed,
means the index number ascertained and declared by the competent authority by
notification in the Official Gazette to be the cost of living index number applicable to
employees in such employment.
 Employer: “employer” means any person who employs, whether directly or through
another person, or whether on behalf of himself or any other person, one or more
employees in any scheduled employment in respect of which minimum rates of wages
have been fixed under this Act.
 Scheduled employment: “scheduled employment” means employment specified in the
Schedule or any process or branch of work forming part of such employment.
 Wages: “wages” means all remuneration, capable of being expressed in terms of money,
which would, if the terms of the contract 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.
 Employee: “employee” means any person who is employed for hire or reward to do any
work, skilled or unskilled, manual or clerical, in scheduled employment in respect of
which minimum rates of wages have been fixed; and includes an out-worker to whom
any articles or materials are given out by another person to be made up, cleaned,
washed, altered, ornamented, finished, repaired, adapted or otherwise processed for
sale for the trade or business of that other person where the process is to be carried out
either in the home of the out-worker or in some other premises not being premises
under the control and management of that other person; and also includes an employee
 declared to be an employee by the appropriate Government; but does not include any
member of the Armed Forces of the Union.
 Agricultural income tax law: means any law for the time being in force relating to the
levy of tax on agricultural income.
CHAPTER 8
OFFENCES AND PENALTIES
Cognizance of offences

 No court shall take cognizance of any offence punishable under this Code
 No court inferior to that of a Metropolitan Magistrate or Judicial Magistrate of the first
class shall try the offences under this Code.

Power of officers of appropriate Government to impose penalty in certain cases.

 The appropriate Government may appoint any officer not below the rank of Under
Secretary to the Government of India or an officer of equivalent rank in the State
Government, as the case may be, for holding enquiry in such manner, as may be
prescribed by the Central Government.
 While holding the enquiry, the officer shall have the power to summon and enforce
attendance of any person acquainted with the facts and circumstances of the case to
give evidence or to produce any document, which in the opinion of such officer, may be
useful for or relevant to the subject matter of the enquiry and if, on such enquiry, he is
satisfied that the person has committed any offence under the provisions.
Penalties for offences.

 Any employer who—

(a) Pays to any employee less than the amount due to such employee under the provisions of
this Code shall be punishable with fine which may extend to 50,000 rupees.
(b) Having been convicted of an offence, is again found guilty of similar offence, within five
years from the date of the commission of the first or subsequent offence, he shall, on the
second and the subsequent commission of the offence, be punishable with imprisonment for a
term which may extend to three months or with fine which may extend to one lakh rupees, or
with both.
(c) Contravenes any other provision of this Code or any rule made or order made or issued
thereunder shall be punishable with fine which may extend to twenty thousand rupees.

 The offences of non-maintenance or improper maintenance of records in the

establishment, the employer shall be punishable with fine which may extend to ten
thousand rupees.
Offences by companies.
  If the person committing an offence under this Code is a company, every person who, at the
time the offence was committed was in charge of, and was responsible to the company for the
conduct of business of the company, as well as the company, shall be deemed to be guilty of the
offence and shall be liable to be proceeded against and punished accordingly.
 where an offence under this Code has been committed by a company and it is proved that the
offence has been committed with the consent or connivance of, or is attributable to any neglect
on the part of, any director, manager, secretary or other officer of the company, such director,
manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be
liable to be proceeded against and punished accordingly.

Composition of offences.

 Every officer shall exercise the powers to compound an offence, subject to the direction, control
and supervision of the appropriate Government.
 Every application for the compounding of an offence shall be made in such manner as may be
prescribed.
 Any offence is compounded before the institution of any prosecution, no prosecution shall be
instituted in relation to such offence, against the offender in relation to whom the offence is so
compounded.
 The composition of any offence is made after the institution of any prosecution, such
composition shall be brought by the officer in writing, to the notice of the court in which the
prosecution is pending and on such notice of the composition of the offence being given, the
person against whom the offence is so compounded shall be discharged.
 Any person who fails to comply with an order made by the officer, shall be punishable with a
sum equivalent to 23% of the maximum fine provided for the offence, in addition to such fine.