Context: Recently, the Ministry of Labour and Employment has published the draft rules framed for the implementation of the Code on Wages Act, 2019.
Key Points

• The latest draft rules are similar to the preliminary draft published in November 2019 with one major change.
• The Ministry has changed the work requirement for eligibility for minimum wages and other benefits from nine hours to eight.
• The latest draft clarified the issue as the nine hours mentioned earlier included one hour of rest, which has now been mentioned separately from the eight working hours.

About Code on Wages Act 2019

• Aims to transform the old and obsolete labour laws into more accountable and transparent ones and seeks to pave the way for the introduction of minimum wages and labour reforms in the country.
• Removes the multiplicity of wage definitions, which can significantly reduce litigation as well as compliance cost for employers.
• Regulates the wages and bonus payments in all employments where any industry, trade, business, or manufacturing is being carried out.
• Links minimum wage across the country to the skills of the employee and the place of employment.
• It simplifies the methodology to fix minimum wage by doing away with the ‘type of employment’.
• It seeks to universalise the provisions of minimum wages and timely payment of wages to all employees irrespective of the sector and wage ceiling.

Key Provisions of Draft Wage Rules

• Working hours: The normal working day shall comprise eight hours of work and one or more intervals of rest which in total shall not exceed one hour.
• Central Advisory Board: Government will set up a Central advisory board to fix the floor-level minimum wages.
• Calculation of minimum wage: The criteria for fixing the minimum rate of wages per day for employees include: (i) standard family of four (self, spouse and two children) (ii) daily intake of 2700 calories per consumption unit, (iii) 10% expenditure on rent, (iv) 20% expenditure of fuel, electricity, and miscellaneous items, and (v) 25% expenditure on education, medical requirements and contingencies.
• Norms for fixing minimum wage: Minimum wages will be calculated on the basis of the geographical area of employment and the skill category of an employee.  
• For this purpose, the central government will divide the geographical area into three categories: metropolitan,, non-metropolitan and rural areas.
• The occupations are also divided into four skill categories: unskilled, semi-skilled, skilled and highly skilled.
• Technical committee: A Technical Committee will be formed to suggest, modify, add or delete particular occupations in the tentative list of four categories: unskilled, semi-skilled, skilled and highly skilled.