The Code On Wages, 2019 – Highlights

THE CODE ON WAGES, 2019

HIGHLIGHTS OF THE CHANGES MADE

MINIMUM WAGES

1.     HRA – No more part of minimum wages
2.     Geographical Areas classified as metropolitan, non metropolitan and rural areas (Rule 4)
3.     The employees employed in supervisory or Managerial position are also eligible for Minimum Wages
4.      Statutory force given for national floor level wages

PAYMENT OF BONUS

1. The Code is silent about the applicability of bonus chapter if the threshold limit falls below subsequently
2. Wages ceiling for eligibility for Bonus: To be fixed by the Appropriate Governments
3. Wages ceiling for calculation of Bonus : To be fixed by the Appropriate Governments
4. Mode of payment of bonus – Only by giving bank credit
5. Disqualification for bonus: ‘conviction for sexual harassment added
6. In case of non-payment of minimum bonus to the contract worker, company should pay the same. But no specification  about recovery from contractor

PAYMENT OF WAGES

1. Contractor’s payment shall be ensured by Company before the contractor makes the payment of wages to his employees
2. Payment of Wages Act – Ceiling of Rs 24000/- removed now – the Act applies to all
3. In case of separation, including resignation, the settlement is to be made within the next two working days
4. Daily wage shall be paid by the end of the day
5. Weekly wage shall be paid on the last working day of the week
6. Fortnightly wage shall be paid within 2days after the end of the period
7. Monthly wages shall be paid within 7 days after the month
8. Total amount of deduction in any wage period from the wages of employed person shall not exceed 50% (Currently in case of co-operative Society – 75 %)
9. Recovery of advance can be done without any stipulated time but with one condition i.e. Recovery can’t go more than 50% on any wage period

EQUAL REMUNERATION

1. Now all gender can claim equal remuneration

COMMON POINTS

1 Period of limitation is 3years for a claim.

2 In case non-payment of MW, Bonus & Equal remuneration – in addition to the amount payable, 10 times of such amount can be recovered from the employer

3 Introduction of Web-based inspection Scheme

4 The role of the inspector is modified as Inspector cum facilitator

5 In case of a complaint, the Court can take cognizance directly from the employee and the Registered Trade

Union

6 Burden of Proof – lies with the employer

7 Common definition for ‘wages’ for all the four existing laws

8 Certain allowances, excluded for Minimum Wages and Bonus but included for Payment of Wages and Equal Remuneration (Convey, HRA, Remuneration under Settlement & Award and OT)

9 A cap – 50 % -fixed for ‘excluded Components’.

10 The employee does not include the contract laborers.

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Navaneethan

Associate Business Manager
Consultation and Audit Services

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