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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- [email protected]