The Code on Wages, 2019.

Institute of Company Secretaries of

India
-The Catalyst for Good Governance
Anand Gopalan
T.S.Gopalan & Co
The Code on Wages, 2019.
Timeline of the Code:
• Passed in the Lok Sabha on 30.07.2019

• Passed in the Rajya Sabha on 02.08.2019

• Got President’s assent on 08.08.2019

• Published in Gazette dated: 08.08.2019

The Code on Wages, 2019.

HAS THE CODE ON WAGES 2019

COME INTO FORCE?

NO
IT IS YET TO BE NOTIFIED
The Code on Wages, 2019.

This Code repeals and subsumes the following Acts:

• The Minimum Wages Act, 1948.
• The Payment of Wages Act, 1936.
• The Payment of Bonus Act, 1965.
• The Equal Remuneration Act, 1976.
 The Code on Wages, 2019.
Name of the Act No of Sections
The Minimum Wages Act, 1948 31
The Payment of Wages Act, 1936 26
The Payment of Bonus Act, 1965 40
The Equal Remuneration Act, 18
1976
Total 115

The Code on Wages Act 2019 69

 The Code on Wages, 2019.
Topic Old Act Code of Wages

Minimum Wages 31 10

Payment of Wages 26 11

Payment of Bonus 40 16

Equal
18 2
Remuneration
 DEFINITIONS
Chapter - I
Sections 2(a) to 2(z)
 DEFINITIONS

Appropriate Government
DEFINITIONS
 DEFINITIONS

CONTRACT LABOUR
DEFINITIONS

WAGES
DEFINITIONS
 WAGES – Part 1
• (y) "wages" means all remuneration whether by way of salary,
allowances or otherwise, expressed in terms of money or
capable of being 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,—
(i) basic pay;
(ii) dearness allowance; and
(iii) retaining allowance, if any,
 WAGES – Part 2
but does not include––
(a) 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;
(b) the value of any house-accommodation, or of the supply of light,
water, medical attendance or other amenity or of any service
excluded from the computation of wages by a general or special
order of the appropriate Government;
(c) any contribution paid by the employer to any pension or provident
fund, and the interest which may have accrued thereon;
(d) any conveyance allowance or the value of any travelling concession;
 WAGES – Part 3
but does not include––
(e) any sum paid to the employed person to defray special expenses
entailed on him by the nature of his employment;
(f) house rent allowance;
(g) remuneration payable under any award or settlement between the
parties or order of a court or Tribunal;
(h) any overtime allowance
(i) any commission payable to the employee;
(j)any gratuity payable on the termination of employment;
(k) any retrenchment compensation or other retirement benefit
payable to the employee or any ex gratia payment made to him on the
termination of employment:
 WAGES – Part 4
Provided that, for calculating the wages under this clause, if payments made by the
employer to the employee under clauses (a) to (i) exceeds one-half, or such other
per cent. as may be notified by the Central Government, of the all remuneration
calculated under this clause, the amount which exceeds such one-half, or the per
cent. so notified, shall be deemed as remuneration and shall be accordingly added
in wages under this clause:
Provided further that for the purpose of equal wages to all genders and for the
purpose of payment of wages, the emoluments specified in clauses (d), (f), (g) and
(h) shall be taken for computation of wage.
Explanation.––Where an employee is given in lieu of the whole or part of the
wages payable to him, any remuneration in kind by his employer, the value of such
remuneration in kind which does not exceed fifteen per cent. of the total wages
payable to him, shall be deemed to form part of the wages of such employee;
 DEFINITIONS
Component Quantum
Basic Wages 5000
Dearness Allowance 4500
Total 9500

Component Quantum Component Quantum

Basic Wages 4000 Basic Wages 4000
Dearness 2500 House Rent Allowance 2500
Allowance
House Rent 3000 Washing Allowance 3000
Allowance
Total 9500 Total 9500
Wages = 4000+750 4750
DEFINITIONS

EMPLOYEE
&
WORKER
 DEFINITIONS

SAME WORK OR WORK OF SIMILAR

NATURE
DEFINITIONS
MINIMUM WAGES
Chapter - II
Sections 5 to 14
 Minimum Wages
NEW CODE OLD ACT NEW CODE OLD ACT
(Section 5 to (Section 5 to
Section 14) Section 14)

Section 5 Section 12 Section 10 Section 15

Section 6 Section 3 Section 11 Section 16

Section 7 Section 4 Section 12 Section 17

Section 8 Section 5 & 9 Section 13 Section 13

Section 9 Section 14 Section 14

 MINIMUM WAGES

SCHEDULED EMPLOYMENT
 MINIMUM WAGES

FIXATION OF MINIMUM WAGES

MINIMUM WAGES

FLOOR WAGE
 MINIMUM WAGES

OVERTIME WAGES
NORMAL RATE OF WAGES
PAYMENT OF WAGES
Chapter III
Sections 15 to 25
 PAYMENT OF WAGES
NEW CODE OLD ACT NEW CODE OLD ACT

Section 15 Section 6 Section 22 Section 11

Section 23 Section 12
Section 16 Section 4
Section 24 Section 12A
Section 17 Section 5
Section 25 Section 22
Section 18 Section 7
Section 19 Section 8
Section 20 Section 9
Section 21 Section 10
PAYMENT OF WAGES

MODE OF PAYMENT
 PAYMENT OF WAGES

WAGE PERIOD
TIME LIMIT FOR PAYMENT OF WAGES
PAYMENT OF BONUS
Chapter – IV
Sections 26-41
 PAYMENT OF BONUS
NEW CODE OLD ACT

Section 26 Section 8, Section 13,

Section 10, Section11,
Section 12
Section 27 Section 13
Section 28 Section 14
Section 29 Section 9
Section 30 Section 3
Section 31 Section 15
Section 32 Section 4
Section 33 Section 5
Section 34 Section 6
PAYMENT OF BONUS

Accounting Year
 PAYMENT OF BONUS

Wage ceiling for bonus eligibility

PAYMENT OF BONUS

Wages for Bonus Calculation

 PAYMENT OF BONUS

Bonus Proportionate to Attendance

above 8.33%
PAYMENT OF BONUS

Dispute – 8.33% to be paid.

 PAYMENT OF BONUS

Disqualification for Bonus

-Conviction for Sexual harassment
 PAYMENT OF BONUS
• Twenty or more persons. • Eligible if worked for 30 days
• 5 years infancy protection. • Allocable and Available Surplus
• 8.33% & 20%. calculation
• 8 months time limit. • Set on and Set off of allocable
Surplus
• Exemptions.
• Deduction- Loss
• Adjustment of
Advance/pooja/Customary
bonus.
 GENERAL
PROVISIONS
CHAPTERS V to IX
Section 42 to 69
ADVISORY BOARDS
APPELLATE AUTHORITY
INSPECTORS cum
FACILITATORS
WEB BASED INSPECTION
SCHEME
COMPOUNDING OF OFFENCE
COGNIZANCE OF OFFENCES
OFFICER TO IMPOSE
PENALTY
 PUNISHMENTS
Offence 1st Time Repeated within 5 years

Non Payment of any amount

Rs.50,000 Rs.1,00,000 or 3 months
to an employee in terms of
this Code

Any other provision of the

Rs.20,000 Rs.40,000 or One month
Code
Non-Maintenance or
Improper Maintenance of Rs.10,000 -
Registers
BURDEN OF PROOF
LIMITATION
 Changes brought by the
Code
• Concept of Scheduled Industries dropped;

• Floor wages introduced;

• Number of minimum rates of wages to be kept at minimum;

• No changes in the component of minimum wages;

• Power of Govt to fix floor wages depending on the geographical

area;
THANK YOU
ANAND GOPALAN
Partner
T.S.Gopalan& Co.,
Advocates & Notaries,
No. 17, Lakshman street, T.Nagar,
Chennai – 600 017.
Mobile-9940157326
Email- anand@tsgandco.com