Thursday, 28 November 2019

The Code On Wages Bill, 2019

India begins the process of codification of its labour laws, a long-awaited and much-needed reform. India's new Code on Wages, 2019 ("Code on Wages") has been approved by both the Houses of the Parliament. It is now awaiting Presidential assent in order to become law:

Key Highlights: 


1. Employee definition includes Supervisory, Administrative and Managerial employees too
2. 24K sealing for employee definition dissolved
3. Schedule Employment abolished. Thus now almost everyone will be covered under the definition of Employee
4. OT double of normal wages VS current practice of double of Basic + DA
5. Consent of Employees for OT required.
6. There will be a National Floor wage. No state to have MW less than this.
7. F&F payment within 2 days after reliving
8. Inspector Vs Inspector-cum-Facilitator. Advisory role to Employer and Workers
9. Related Rules and Implementation date is pending. We need to wait.
10. Digital compliance enhanced
11. Basic + DA must be min 50% of  gross wages
12. Wages paid in Kind cannot be more than 15% of the Gross wages.
13. Bonus shall be applicable to all even if the Basic + DA exceeds 21K. Need to wait for the rules for more clarity.
14. There is no gender discrimination in this code.
15. Conviction for Sexual Harassment stands as disqualification for Bonus applicability.
16. Web based inspection process introduced
17. Employee and Worker defined separately.
18. Electronic payments encouraged
19. Penalties will increase 10x
20. Now even a Employee and Trade Union can file a complaint against a organisation. Earlier only the Inspector had this right.
21. Minimum Wages = Basic + DA + Retention Allow (Eg - Sugar Mills)
22. Minimum Wages will be revised every 5 years by Govt. Periodical revisions of DA will continue as it is.
23. Deductions from wages to be only as per prescription of law. No other deductions will be allowed.
24. 4 Central acts merged in this code, namely Minimum Wages, Payment of Wages, Bonus Act and Equal Remuneration Act. It has 9 Chapters.

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