2019 – Posted in: Daily News – Tags: The Codes on Wages Bill - a comparision

THE CODES ON WAGES BILL 2019

For: Mains

Topics covered: The Codes on Wages Bill, Highlights, and Advisory Board

News Flash

The Union Cabinet has approved The Code on Wages Bill 2019.

The Code on Wages is one of the four codes that would subsume 44 labour laws with certain amendments.
The four codes will deal with wages, social security, industrial safety and welfare, and industrial relations.

Background

The government had introduced The Codes on Wages Bill in the Lok Sabha in 2017.
The bill was referred to the Parliamentary Standing Committee.
The committee submitted its report in December 2018.

The Code on Wages Bill

The bill seeks to subsume existing laws related to workers’ remuneration.
Bill enables the Centre to fix minimum wages for the entire country.

The Code replaces four existing laws

(i) Payment of Wages Act, 1936

(ii) Minimum Wages Act, 1948

(iii) Payment of Bonus Act, 1965

(iv) Equal Remuneration Act, 1976

The bill provides that the Central Government will fix minimum wages for certain sectors, including railways and mines.
The state government would be free to set minimum wages for other categories of employment.
The code also provides for setting up of a national minimum wage.
The minimum wage may be set by the central government.
The state cannot set a minimum wage lower than the national minimum wage.
The draft law also says that the minimum wage would be revised every five years.
The overtime rate will be at least twice the normal rate of wages of the employee.

Advisory Boards

The central government and state governments will constitute the Central Advisory Board and State Advisory Boards respectively.

These boards will consist of

(i) employers

(ii) employees in equal number as the employers

(iii) independent persons (not exceeding one-third of the total members of the board).

They will advise the central or state governments on issues such as setting and revision of minimum wages and increasing employment opportunities for women, among others.

Comparison of current wage laws with the proposed Code

Provision	Current Laws	Code on Wages, 2017
Coverage	Minimum Wages Act: Minimum wages are fixed for scheduled employments with more than 1,000 employees. Payment of Wages Act: Applies to employees whose wages do not exceed Rs 24,000 per month. Payment of Bonus Act: Applies to employment with 20 or more persons and for employees whose wages do not exceed Rs 21,000 per month.	Minimum wages will be paid to all employees. Provisions regarding payment of wages will apply to all employees. Bonus will apply to employees whose wages do not exceed a monthly amount notified by central or state governments.
Revision of minimum wages	Minimum Wages Act: Minimum wages must be revised by the central or state governments at least once every five years.	Mandates that minimum wages be revised in five-year intervals.
National minimum wage	No Provision	The central government may set a national minimum wage and may set different national minimum wages for different states and regions.
Overtime Wage	Minimum Wages Act: Allows the relevant central or state governments to set overtime wage.	Sets overtime wage at two times the normal wages.
Gender discrimination	Equal Remuneration Act: Prohibits gender discrimination in wage payment. Prohibits gender discrimination in recruitment, transfers, and promotions.	Prohibits gender discrimination in wage payment. No provision.
Inspections	Minimum Wages Act, Payment of Wages Act, Payment of Bonus Act, and Equal Remuneration Act: Inspectors are appointed to carry out (i) surprise checks, and (ii) examine persons and require them to give information, among other powers.	Appointment of a Facilitator to carry out inspections, and provide information to employers and employees for better compliance. The inspection will be done on the basis of an inspection scheme, which will include a web-based inspection schedule. The inspection scheme will be decided by the central or state governments.
Penalties	Minimum Wages Act: Offences include (i) paying employees less than minimum wages, and (ii) not providing for a day of rest in the week. Penalties include fines up to Rs 500 and imprisonment up to six months. Payment of Wages Act: Offences include (i) non-payment of wages at specified time period, (ii) unauthorised deductions from wages. Penalties include fines up to Rs 7,500. Payment of Bonus Act: In case a person or company does not comply with the Act, they can be punished with imprisonment up to six months or fine up to Rs 1,000. Equal Remuneration Act: Offences include: (i) non-maintenance of documents in relation to employees, and (ii) discrimination against women in recruitment. Penalties include fines up to Rs 20,000 or imprisonment up to one year.	Employers who pay less than what is due under the Code will pay a fine of up to Rs 50,000. If an employer is guilty of repeat offence within five years, penalties include imprisonment up to three months or a fine of up to Rs 1 lakh or both. Employers who do not comply with any other provision of the Code will pay a fine of up to Rs 20,000. If an employer is guilty of the same offence again within five years, penalties include imprisonment up to one month or a fine of up to Rs 40,000 or both.

Source: The Hindu Businessline

You can follow us on LinkedIn and for more updates related to UPSC IAS Preparation, Like our Facebook Page and subscribe our Diligent IAS Youtube Channel