The Code on Wages was introduced by Ministry of Labor and Employment in 23rd July 2019 in Lok Sabha and Billed Passed in Lok Sabha on 30th July 2019 and in Rajya Sabha on 2nd Aug 2019.
The code of Wages 2019 seeks to regulate wage and bonus payments in all employments where any industry, trade, business or manufacturing is carried out.
The Code replaces the following four laws:
- The Payment of Wages Act, 1936
- The Minimum Wages Act, 1948
- The Payment of Bonus Act, 1965
- The Equal Remuneration Act, 1976
Benefits of Code on Wages
For Employees
- Increased minimum wages: The Code sets a minimum wage that must be paid to all employees, regardless of their skills or experience. This will help to ensure that all workers are paid a fair wage for their work.
- Improved bonus payments: The Code sets new rules for bonus payments, which will make it easier for employees to earn a bonus. Employees will now be entitled to an annual bonus of at least 8.33% of their wages, or Rs 100, whichever is higher.
- Enhanced social security benefits: The Code increases the amount of money that employers must contribute to social security schemes for their employees. This will help to ensure that employees have a safety net in case of illness, injury, or unemployment.
- Simplified payroll processing: The Code simplifies the process of calculating and paying wages. This will save businesses time and money.
For Employers
- Increased productivity: By ensuring that employees are paid a fair and equal wages and have access to enhanced social security benefits, the Code on Wages can help to boost productivity and attract and retain top talent.
- Reduced compliance costs: The Code on Wages simplifies the process of calculating and paying wages, which can help to reduce compliance costs for businesses.
- Improved transparency: The Code on Wages makes it easier for employers and employees to understand their rights and obligations under the law. This will help to reduce conflict and boost morale.
For Indian Economy
- Increased Economic growth: By boosting productivity, attracting foreign investments, and creating jobs, the Code on Wages can help to boosts economic growth of India.
- Reduced poverty: By ensuring that all workers are paid a fair wage, the Code on Wages can help to reduce poverty in India.
- Improved social stability: By providing a safety net for workers and their families, the Code on Wages can help to improve social stability in India.