Parliament Approves Wage Code Bill To Bring In Minimum Wages In India

In what could come as a boost to the government’s labour reforms, the Parliament on Friday approved the wage code bill to bring in a minimum wage for every worker in India, besides addressing issues like delay in payments to employees.

The Code on Wages Bill, 2019, will benefit 50 crore workers in India, said Union Labour Minister Santosh Gangwar in the Rajya Sabha.

The Upper House approved the bill with 85 members voting for and eight against. The Lok Sabha had cleared the legislation on July 30.

The Code on Wages Bill, 2019, will subsume four labour laws—The Minimum Wages Act of 1948, The Payment of Wages Act of 1936, The Payment of Bonus Act of 1965 and The Equal Remuneration Act of 1976.

After its enactment, all these four acts would be repealed.

"Every labourer should have a respectful life. It's a historic bill. About 50 crore labourers will benefit,” said Gangwar while introducing the wage code bill in the Rajya Sabha.

While drafting the bill, the labour minister said, the government accepted 17 out of the 24 recommendations made by Parliament’s Standing Committee that had scrutinised a similar bill introduced in the 16th Lok Sabha.

Replying to the discussion on the wage code bill, Gangwar said all workers in India will come under the ambit of minimum wages. He assured the Upper House that the central government would not fix the minimum wages but the states will.

"The centre will not take the rights of the states", the labour minister said.

According to the wage code bill, a tripartite committee—comprising representatives of trade unions, employers and the state government—would fix a minimum wage for workers throughout the country. The draft law will also address the problems relating to delay in payment of wages, irrespective of whether they are paid on a monthly, weekly or daily basis.

The bill also ensures no discrimination among male, female and transgender workers in getting wages, the labour minister said. The wage code universalises the provisions of minimum wages and timely payment of wages to all employees irrespective of the sector and wage ceiling. The minimum wage will be computed based on minimum living conditions.

At present, provisions of both Minimum Wages Act and Payment of Wages Act apply on workers below a particular wage ceiling working in scheduled employments only. There are currently 12 definitions of wages in the different labour laws, leading to litigation besides difficulty in their implementation.

The definition has been simplified in the wage code bill and is expected to reduce litigation and compliance cost for employers.

The wage code bill was first introduced in Lok Sabha on Aug. 10, 2017. It was referred to a Parliamentary Standing Committee that submitted its report on Dec. 18, 2018. However, due to the dissolution of 16th Lok Sabha, the bill had lapsed.

A fresh bill was drafted after considering the recommendations of the Parliamentary Standing Committee and other suggestions of the stakeholders. Seventeen out of the 24 recommendations of the standing committee have been accepted.

State government are also free to review their minimum wages in 2-3 years but not in more than five years.