Code on wages – 2019:

1. Code is composed of four major laws:

a. The Pmt of wages act, 1936
b. The Pmt of minimum wages act, 1948
c. The Pmt of bonus act, 1965
d. The Equal remuneration act, 1976

Major changes due to new code on wages, 2019:

1. Coverage and applicability: Whole of India to all employees (ceiling of
Rs.24000 is done away with) and all employers (unless exempted)
2. Uniform definition of wages: (Basic + DA + Retaining allowance, the Code
provides that in the event payments made to employees under other
components exceed 50% of all remuneration payable as ‘wages’ under
the Code, such excess amount shall be deemed as remuneration and will
be considered as ‘wages’)
3. Definition of employee (The definition of ‘Employee’ has been amended
to include all category of employees including Managers, Supervisors,
Administrative, Operational persons.)
4. Definition of employer (contractor included)
5. Time of payment of wages: Settlement period for monthly wages has
been specified as on the 7th day of the succeeding month, as against
10th day of the succeeding month.
6. Termination, dismissal, resignation: Payment within 2 working days.
7. Mode of payment: Wages to be deposited in the bank account of
employees, electronically or by cheque. Wages can be paid in cash, only
up to an amount notified by the Central Government.
8. Registers can be electronically maintained.
9. Minimum wage fixation has been universalized (for all types of
employment) – based on geography and skills, not on type of
employment.
10.Concept of ‘Floor wage’ (Central govt.)
11.Prohibits gender discrimination
12.Overtime pay (not less than twice the normal rate of wages)
13.Enforcement of labour laws with transparency (web based).
14.Inspector cum facilitator (includes advisory role).
15.Limitation period of claims by the employees has been raised to 3 yrs
 16.Offences and penalties:
a. Paying less than the due wages: Fine upto Rs.50000/-, repeats
same offence within 5 years: fine upto Rs.100000/- or
imprisonment upto 3 months or both.
b. Contravening any provision of the code: Fine upto Rs.20000/-,
repeats same offence within 5 years: fine upto Rs.40000/- or
imprisonment upto 3 months or both.
c. Improper or non-maintenance of records: Rs.10000/-

Code on wages – 2019: (Complete explanation)

Chapter 1: Preliminary
Sec 1: Extends to whole of India [to all employees (ceiling of Rs.24000 is done
away with) and all employers (unless exempted)]
Sec 2: Definitions
 Employee - The definition of ‘Employee’ has been amended to include all
category of employees including Managers, Supervisors, Administrative,
Operational persons
 Worker - Worker definition includes any person employed in any
Industry to do any manual, unskilled, skilled, technical, operational,
clerical or supervisory work for hire or reward.
It also includes ‘working journalist’ and ‘sales promotion employees’
Note: There is a distinction made between ‘employee’ and ‘worker’. The
employee definition includes all employees including managers, supervisors
and administrative staff whereas the worker definition does not include
administrative and managerial staff. The supervisors are also excluded from
the definition of the worker if their monthly wage is more than Rs.15,000 or
the sum notified by the Central Government. The term ‘worker’ excludes
managerial and supervisory employees and includes sales promotion
employees and working journalists.
 Definition of employer (contractor included)
 Uniform definition of wages: (Basic + DA + Retaining allowance, the Code
provides that in the event payments made to employees under other
components exceed 50% of all remuneration payable as ‘wages’ under
 the Code, such excess amount shall be deemed as remuneration and will
be considered as ‘wages’)
Sec 3: Prohibition of discrimination on ground of gender in wages and in
conditions of employment.
 No discrimination among employees on the ground of gender in the
matter of wages for similar work or work of similar nature.

Chapter II – Minimum wages