the code on wages, 2019. - icsi - home

Institute of Company Secretaries of India

-The Catalyst for Good Governance

Anand Gopalan

T.S.Gopalan & Co

The Code on Wages, 2019.

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,

1976

18

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

Remuneration18 2

DEFINITIONSChapter - 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 orcapable of being so expressed which would, if the terms ofemployment, express or implied, were fulfilled, be payableto a person employed in respect of his employment or ofwork done in such employment, and includes,—

(i) basic pay;

(ii) dearness allowance; and

(iii) retaining allowance, if any,

WAGES – Part 2but does not include––

(a) any bonus payable under any law for the time being in force, whichdoes not form part of the remuneration payable under the terms ofemployment;

(b) the value of any house-accommodation, or of the supply of light,water, medical attendance or other amenity or of any serviceexcluded from the computation of wages by a general or specialorder of the appropriate Government;

(c) any contribution paid by the employer to any pension or providentfund, and the interest which may have accrued thereon;

(d) any conveyance allowance or the value of any travelling concession;

WAGES – Part 3but does not include––

(e) any sum paid to the employed person to defray special expensesentailed on him by the nature of his employment;

(f) house rent allowance;

(g) remuneration payable under any award or settlement between theparties 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 benefitpayable to the employee or any ex gratia payment made to him on thetermination of employment:

WAGES – Part 4Provided that, for calculating the wages under this clause, if payments made by theemployer to the employee under clauses (a) to (i) exceeds one-half, or such otherper cent. as may be notified by the Central Government, of the all remunerationcalculated under this clause, the amount which exceeds such one-half, or the percent. so notified, shall be deemed as remuneration and shall be accordingly addedin wages under this clause:

Provided further that for the purpose of equal wages to all genders and for thepurpose 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 thewages payable to him, any remuneration in kind by his employer, the value of suchremuneration in kind which does not exceed fifteen per cent. of the total wagespayable to him, shall be deemed to form part of the wages of such employee;

DEFINITIONS

Component Quantum

Basic Wages 4000

Dearness Allowance

2500

House Rent Allowance

3000

Total 9500

Component Quantum

Basic Wages 5000

Dearness Allowance 4500

Total 9500

Component Quantum

Basic Wages 4000

House Rent Allowance 2500

Washing Allowance 3000

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

(Section 5 to

Section 14)

OLD ACT

Section 5 Section 12

Section 6 Section 3

Section 7 Section 4

Section 8 Section 5 & 9

Section 9

NEW CODE

(Section 5 to

Section 14)

OLD ACT

Section 10 Section 15

Section 11 Section 16

Section 12 Section 17

Section 13 Section 13

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 WAGESNEW CODE OLD ACT

Section 15 Section 6

Section 16 Section 4

Section 17 Section 5

Section 18 Section 7

Section 19 Section 8

Section 20 Section 9

Section 21 Section 10

NEW CODE OLD ACT

Section 22 Section 11

Section 23 Section 12

Section 24 Section 12A

Section 25 Section 22

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

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

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.

• 5 years infancy protection.

• 8.33% & 20%.

• 8 months time limit.

• Exemptions.

• Adjustment of Advance/pooja/Customary bonus.

• Eligible if worked for 30 days

• Allocable and Available Surplus calculation

• Set on and Set off of allocable Surplus

• Deduction- Loss

GENERAL PROVISIONS

CHAPTERS V to IXSection 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 to an employee in terms of

this Code

Rs.50,000 Rs.1,00,000 or 3 months

Any other provision of the Code

Rs.20,000 Rs.40,000 or One month

Non-Maintenance or Improper Maintenance of

RegistersRs.10,000 -

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;

• Advise of the Central Advisory Board & consult the State

THANK YOUANAND GOPALAN

PartnerT.S.Gopalan& Co.,

Advocates & Notaries,No. 17, Lakshman street, T.Nagar,

Chennai – 600 017.Mobile-9940157326

Email- anand@tsgandco.com