New Labour

Codes 2020

Comparison of New Labour Codes with Previous Acts

Part- 3: Previous Acts and Code on Wage
 New Labour Codes, 2020
2. Labour Code on
1. Labour Code on 3. Labour code 4. Labour Code on social
Occupational Safety,
Industrial Relations on Wages security
Health and Working
Conditions
Minimum Wages Employees’ Provident Fund
Trade Unions Act,
Act, and Miscellaneous Provisions
1926,
Factories Act, Act,
• Payment of
Wages Act,
Industrial
• Payment of Employees’ State Insurance
Employment
Bonus Act, Corporation Act,
(Standing Orders) Mines Act
Act, 1946, and • Equal
Remuneration
Act. Maternity Benefits
Industrial Disputes Dock Workers (Safety, Act,
Act, 1947. Health and Welfare) Act.

Building and Other

Construction Workers Act and
the Employees’ Compensation
Act

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 Previous Acts Code on Wages

Coverage The Minimum Wages Act, 1948: Minimum wages will be paid
and Minimum wages are fixed by the to all employees.
applicability appropriate State Governments for Provisions regarding payment
scheduled employment with more of wages will apply to all
than 1,000 employees in the State. employees in both organized
The Payment of Wages Act, 1936 as well as unorganized
whose wages do not exceed Rs.24,000 sectors, irrespective of any
per month. such wage limit.
The Payment of Bonus Act, 1965:
Applies to every establishment which
has 20 or more employees whose
wages do not exceed Rs.21,000 per
month.
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 Definition of wages under the Code
The definition of 'wages' varies across labour legislations in India. The
Code seeks to provide a single uniform definition of 'wages' as applicable
to minimum wages, payment of wages and payment of bonus.

As per the Code –

• (i) Basic pay,

• (ii) Dearness allowance and
• (iii) Retaining allowance have been included as
components of 'wages'.
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 Exclusion from ‘Wages’
(c) Employer
(b) Value of the
contributions to any (d) Conveyance
(a) Bonus payments; house-
pension or provident allowances;
accommodation, etc.
fund;

(e) Defray special

(g) Remuneration
expenses on him by (f) House rent (h) Overtime
payable under award
the nature of his allowance; allowance;
or settlement
employment;

(k) Retrenchment
(i) Commission (j) Gratuity payments; compensation or
payable to employee; and, other retirement
benefit

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 Previous Acts Code on Wages

Revision of The Minimum Wages Mandates that minimum

minimum Act, 1948 : Minimum wages be revised in five-year
wages wages must be revised intervals.
by the Central or State
governments at least
once in every five
years

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 Previous Acts Code on Wages

National No provision. Central Government will fix

minimum national minimum wage /floor
wage/Floor wage after taking into account
wage minimum standard of living of
workers.
The State Government shall
not fix minimum wage below
the floor wage.

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Introduce National minimum wage
Set by the central government

• This will act as a floor for state governments to set their respective
minimum wages. The central government may set different national
minimum wages for different states or regions

Different states will set their respective minimum wages

• Both of these states would then have to set their minimum wages either
equal to or more than the national minimum wage applicable in that
state.

Example of United Kingdom and USA

• UK one wage rate is set by the central government for the entire country.
• USA’s central government sets a single minimum wage and states are free
to set a minimum wage equal to or above this floor.
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 Previous Acts Code on Wages
Overtime Different States have Overtime payment shall be at
payment different provisions for two times the normal wages/
overtime payment ordinary wages.
mostly provided in the
Shops and
Establishments Act of
each respective State.

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 Previous Acts Code on Wages

Gender The Equal Prohibits gender

discrimina- Remuneration Act, discrimination in wage
tion 1976: Prohibits gender payment.
discrimination in wage Prohibits any form of gender
payment. discrimination in any of the
Prohibits gender ‘conditions of employment’.
discrimination in
recruitment, transfers,
and promotions.

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 Previous Acts Code on Wages
Claims Claims for wages and The period of limitation for
bonus can be filed filing claims relating to wages
within period varying and bonus has been enhanced
from 6 months to 2 to 3 years.
years.

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Will Benefit Unorganised sector ?
92% of workforce

• The unorganised sector comprises 92% of the total

workforce in the country

Do not have a written contract

• 90% of the workers in the unorganised sector do not
have a written contract, which hampers the
enforcement of various labour laws.

mandates that minimum wages for unorganised sector too

• mandates that minimum wages be paid for all types of
employment – irrespective of whether they are in the
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organised or the unorganised sector.
Next Session:
Code on Social
Security