The Rajya Sabha passed the Code on Wages Bill, 2019, which allows the Centre to set a minimum statutory wage, a move expected to benefit 500 million workers across the country. The bill has been already passed in the Lok Sabha and will now go for President's assent following which it will become an Act. This is the first in a series of four labour codes proposed in the government’s labour reform initiative. The minimum wage fixed by the Centre will no longer be based on employment but on geography and skills. As many as 17 labour laws are more than 50 years old and some even belong to the pre-Independence era.
- The code ensures minimum wages along with timely payment of wages to all employees and workers.
- Many unorganised sector workers like agricultural workers, painters, persons working in restaurants and dhabas and chowkidars, who were outside the ambit of minimum wages, will get legislative protection of minimum wages after the bill becomes an act.
- Besides, the bill will ensure that employees getting a monthly salary are paid by the 7th of the following month. Those working on a weekly basis will be paid on the last day of the week and daily wagers should get them on the same day.
- The push to merge labour laws, which has been in the works for over four years, comes on the back of finance minister Nirmala Sitharaman’s budget statement that the government proposed to streamline the multiple labour laws into a set of four labour codes.
- This will ensure that process of registration and filing of returns will get standardised and streamlined. With various labour-related definitions getting standardised, it is expected that there shall be less dispute.
- The Code on Wages seeks to universalise the provisions of minimum wages and timely payment of wages, which will be computed based on minimum living conditions. It is envisaged that states will notify payment of wages to workers through digital mode.
- The bill was first introduced in the Lok Sabha in 2017 and was referred to the parliamentary standing committee, which submitted its report in December 2018. However, the bill lapsed after the dissolution of the 16th Lok Sabha.
- Under the code on wages, the labour ministry plans to streamline the definition of wages by amalgamating four related statutes: the Minimum Wages Act, 1948, the Payment of Wages Act, 1936, the Payment of Bonus Act, 1965, and the Equal Remuneration Act, 1976.
- There are currently about half a dozen definitions of wages in various acts across the Centre and the states, which employers must grapple with.
- The labour ministry has decided to amalgamate 44 labour laws into four codes — on wages, industrial relations, social security and safety, health and working conditions.