The year 2019 and 2020 saw the unification of the Indian labour laws into 4 labour codes segregating 29 central laws into 4 segments
This consolidation of laws as we know aims at bringing in ease of doing business.
As India nears the implementation of the codes in the coming financial year, we bring to you a snapshot of the codes in the next couple of weeks.
Code on wages
Code on wages was introduced in 2019 and unifies 4 major labour acts. Given below is a sneak-peek into the wage code giving an understanding of how it simplifies the compliance for Employers. Happy Reading.
- The code will replace the four laws namely the Payment of Wage Act,1936, The Minimum Wage Act, 1948, The Payment of Bonus Act, 1965 and Equal Remuneration Act, 1976.
- It will prohibit employers from paying wages less than the minimum wages. Minimum wages will be notified by the central or state government.
- The minimum wages will be revised and reviewed by the central or state government at an interval of not more than five years.
- Under the bill, employees will be entitled to overtime wage, which must be at least twice the normal rate of wage, in case employee work in an excess of the normal working day.
- Under the code, an employee’s wages may be deducted on certain grounds including such as fines, absence from duty, accommodation given by the employer, or recovery of advance given to the employee.
- These deductions should not exceed 50% of the employee’s total wage.
- All employees whose wages do not exceed a specific monthly amount, notified by the Central or state government, will be entitled to an annual bonus
- The bonus will be at least 8.33% of his wage or Rs.100 whichever is higher
- The code will prohibit gender discrimination in matters related to wages and recruitment of employees for the same work or work of similar nature
- Work of a similar nature is defined as work for which the skill, effort, experience and responsibility required are the same.
| COMPLIANCES | BEFORE | AFTER |
| Registers | A total of 10 Registers had to be maintained: -Four Registers under the Minimum Wages Act, 1948Two registers under the Payment of Wages Act, 1936Three registers under the Payment of Bonus Act, 1965One Register under the Equal Remuneration Act, 1976 | Two registers are required to be maintained: – Employee Register under Form-IV Register of Wages, Overtime, Fines, Deductions for damage and loss under Form-I |
| Returns | A total of 4 returns had to be submitted, one each under the Minimum Wages, Payment of Wages, Payment of Bonus and Equal Remuneration Acts respectively | A single return to be filed that covers all the components under the different enactments |
| Consequences | Penalties ranged from a lower range of Rs. 500 to upper range of Rs. 20,000 with imprisonment of 6 months to 1 year | Enhanced penalties of up to 1 lakh have been provided for with imprisonment of up to 3 months |
Stay tuned for more on the labour codes in the coming weeks.