Govt to reintroduce Code on Wages Bill
04 July 2019
The union cabinet on Wednesday approved the re-introduction of the Code on Wages Bill, which makes minimum wages applicable for both formal and informal sectors, enable transfer of wages through the direct benefit transfer mechanism and bolster the system for redressing grievances of labourers.
The bill was introduced during the 16th Lok Sabha and the Standing Committee had also given its report. However, it could not be passed, and hence, it lapsed. This necessitated fresh approval by the cabinet before re-introduction in the Lok Sabha.
The proposed bill aims to merge four central laws — the Payment of Wages Act, 1936, the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965 and the Equal Remuneration Act, 1976. The new bill is expected to be introduced during the ongoing session of Parliament.
According to sources, the proposed bill will provide for all essential elements relating to wages, equal remuneration, and bonus. The provisions relating to wages will be applicable to all forms of employment covering both organised and unorganised sectors. The power to fix minimum wages continues to be vested in the central and state governments in their respective spheres.
The proposed legislation will enable the appropriate government to determine the factors by which the minimum wages shall be fixed for different categories of employees. The factors shall be determined taking into account the skills required, the arduousness of the work assigned, geographical location of the workplace and other aspects which the appropriate government considers necessary.
One of the important provisions of the bill relates to timely payment of wages and authorised deductions from wages, which are presently applicable only to employees drawing wages up to Rs18,000 per month. Under the new bill, this will be made applicable to all employees irrespective of the wage ceiling.
The bill also talks about payment of wages by cheque or through digital or electronic mode or by crediting it in the bank account of the employee. However, the appropriate government may specify the industrial or other establishment, where the wages are to be paid only by cheque or through digital or electronic mode or by crediting the bank account of the employee.