Salient Features of the Code on Wages:

The Wage Code Bill seeks to empower the Centre to set minimum wage across all sectors all sectors in the country and states will have to maintain that.

States will be able to provide for the higher minimum wages in their jurisdiction than fixed by the Centre. Main provisions of this code are:

A. Coverage: The code will apply to all employees. The Central Government will make wage-related decisions for employments such as Railways, Mines and Oil Field, among other. State Government will make decisions for all other employments.

B. Wages include Salary, allowances or any other component expressed in monetary terms. This does not include bonus payable to employees or any travelling allowance, among other.

C. Floor wages: According to Code, the Central Govt. will fix a floor wage, taking into account living standard of workers. Further, it may set different floor wages for different geographical areas.

D. Before fixing the Floor wages, the Central Govt. may obtain the advice of Central Advisory Board and may consult with State Govts.

E. The minimum wages decided by Central or State Govt. must be higher than the floor wages.

F. In case of existing minimum wages fixed by the Central or State Govt. are higher than the floor wages, they cannot reduce the minimum wages.

G. Fixing the minimum wages:

The code prohibits employers from paying wages less than the minimum wages.

Minimum wages will be notified by Central or State Governments. This will be based on time, or number of pieces produced.

The minimum wages will be revised and reviewed by Central or State Govt. at an interval of not more than 5 years.

While fixing minimum wages, the Cetral or state Govt. may take into account factors such as:

1. skill of workers

2. difficulty of work

Overtime: The Central or State Govt. may fix the number of hours that constitute a normal working day. In case employee work in excess on a working day, they will be entitled to overtime wages, which must be at least twice the normal rate of wages.

Payment of wages: wages will be paid in coins, currency notes by cheque or crediting to bank account or through electronic mode. The wage period will be fixed by the employer as either:

1. daily

2. weekly

3. fortnightly

4. monthly

Deductions: Under the code, an employee’s wages may be deducted on certain grounds including:

1. fines

2. absence from duty

3. accommodation given by the employer

4. recovery of advances given to the employee.

These deductions should not exceed 50% of employees total wages.

Gender Discrimination:

The code prohibits gender discrimination in matters related to wages and recruitment of employees for the same work or work of similar nature. Work of similar nature is defined as work for which the skill, effort, experience and responsibility required are the same.

Determination of Bonus:

All employees whose wages do not exceeds specific monthly amount, notified by the Central or state Governments, will be entitled to an annual bonus. The bonus will be at least:

1. 8.33% of his wages,

2. Rs. 100 whichever is higher.

In addition, the employer will distribute a part of gross profit amongst the employees. This will be distributed in proportion to the annual wages of the employees.

The employee can receive a max. bonus of 20% of annual wages.

Advisory Boards:

The Central and State Government will constitute advisory boards. The Central Advisory Boards will consists of:

1. Employers

2. Employees (in equal number as employers)

3. Independent persons

4. Five representatives of State Government.

State Advisory Board:

It will consist of employers, employees and independent persons

Further 1/3 of the total members on both the Central and State Boards will be women.

The Board will advice the respective Governments on various issues including:

1. fixing of minimum wages

2. increasing employment opportunities for women.

Offences:

The code specifies penalties for offences committed by the employer, such as:

1. paying less than the due wages,

2. for contravening any provisions of the code.

The penalties vary depending on the nature of offence, with the maximum penalty being imprisonment for three months along with fine of upto one lakh rupees.