Code on Wages May be Implemented by September, Draft Rules Circulated

New Delhi: The Code on Wages, 2019, the first law under ‘labour reforms’, is likely to be implemented by September as the Ministry of Labour and Employment has put draft rules of the law in public domain for feedback, a senior official said.

Parliament in August last year approved the code to enable introduction of a minimum wage for every worker besides addressing issues like delay in payment to employees.

The labour ministry has put the draft rules issued on July 7 in the official gazette.

"The draft rules on the Code would be open for public feedback for 45 days from July 7, 2019, the day when the labour ministry notified those in the gazette. If everything goes well then the draft rules would be implemented by September after taking into consideration public comments," a senior labour ministry official told PTI.

Labour Minister Santosh Gangwar at the time of passage of the code had asserted in Parliament that it will benefit about 50 crore workers in the country.

The Code on Wages Bill, 2019 seeks to amend and consolidate laws relating to wages, bonus and matters connected therewith. It was passed in Rajya Sabha on August 2, 2019. Lok Sabha passed the Bill on July 30, 2019.

The Code will subsume four labour laws -- Minimum Wages Act, Payment of Wages Act, Payment of Bonus Act and Equal Remuneration Act. After its enactment, all these four Acts would be repealed.

The Code universalised the provision of minimum wages and timely payment of wages to all employees irrespective of the sector and wage ceiling, he said. At present, the provisions of both Minimum Wages Act and Payment of Wages Act apply on workers below a particular wage ceiling working in Scheduled Employments only.

There are 12 definitions of wages in different labour laws leading to litigation besides difficulty in implementation. The definition has been simplified in the Code and is expected to reduce litigation and also reduce compliance cost for employers.

The draft rules provide for eight hours working day under the Code of Wages. Thus there is no change in the working hours provision as provided under the Factories Act. There were apprehensions that the working hours may be increased. During lockdown some states had taken the decision to increase the working hours to make up for the production loss.

The Code provides that the floor wage will be computed based on minimum living conditions which would benefit about 50 crore workers across the country.

As per the draft rules, a central advisory board would fix the floor level minimum wages taking into account the minimum living standard including the food, clothing, housing and any other factors considered by the government.

The Code on Wages is part of ‘labour reforms’ and the first law under the central government's initiative which would be implemented.

The Central government has been working to concise 44 central labour laws into four broad codes on wages, industrial relations, social security and occupational health & safety (OCH).

The Industrial Relations Code, 2019, The Occupational Safety, Health and Working Conditions Code, 2019, and The Code on Social Security, 2019 were introduced in Lok Sabha last year and sent for scrutiny by the Parliamentary Standing Committee on Labour. The panel had submitted reports on codes on industrial relations and OCH. The report on social security code is awaited.