The Code on Wages, 2019 is a landmark labour law reform in India that consolidates four existing wage-related legislations into a single, unified framework. The objective is to ensure universal minimum wage coverage, timely payment of wages, and wage equity across sectors. To help address common concerns and interpretations of its provisions, as per the FAQ issued by Ministry of Labour and Employment, the following doubts have been clarified.

The Code introduces the concept of a national floor wage, removes sector-based limitations on minimum wages, strengthens compliance and enforcement mechanisms, and mandates equal remuneration for men, women, and transgender persons. Overall, it simplifies compliance, reduces legal ambiguity, and enhances social security protections for employees.

The Code on Wages, 2019 unifies India’s wage laws to ensure universal minimum wages, timely payments, gender equality, and stronger enforcement. By introducing a national floor wage and extending coverage to all employees, it creates a transparent, equitable, and simplified wage regulation system.

Key Objectives of the Code on Wages, 2019

• Universal applicability across all employments

• Introduction of a floor wage as a national baseline

• Timely payment of wages and reduced wage disputes

• Gender neutrality and equal pay for equal work

• Simplified definitions and compliance mechanisms

• Enhanced penalties and deterrence against violations

Frequently Asked Questions (FAQs)

Q1. Are Data Entry Operators and similar employees covered under minimum wage provisions?

Answer:
Yes. The concept of scheduled employment has been removed. The Code on Wages is universally applicable to all employees, regardless of sector, designation, or nature of work.

Q2. Is a daily wage worker eligible for bonus under the Code?

Answer:
Yes. Bonus is payable to every employee who has worked for at least 30 days in an accounting year, subject to the wage ceiling prescribed by the appropriate government.

Q3. Will the introduction of floor wage reduce State-fixed minimum wages?

Answer:
No. The floor wage acts only as a baseline. If a State Government has fixed minimum wages higher than the floor wage, it cannot reduce those rates.

Q4. Will the revised definition of wages reduce take-home salary?

Answer:
No. The revised definition enhances transparency and uniformity. Allowances exceeding a notified percentage are added back to wages, thereby increasing the base for provident fund, gratuity, and bonus, strengthening employees’ social security.

Q5. Does the Code allow excessive deductions from wages?

Answer:
No. The Code caps total deductions at 50% of wages, which is more protective than earlier laws that allowed deductions up to 75% in certain cases.

Q6. Can minimum wage fixation become arbitrary under Central Government control?

Answer:
No. Both Central and State Governments fix minimum wages within their respective jurisdictions. These wages must be above the floor wage and determined after consultation with workers’ and employers’ representatives.

Q7. Will inspectors act only in favour of employers?

Answer:
No. Inspectors-cum-facilitators enforce the law while also educating workers about their rights and assisting employers in achieving compliance.

Q8. Have working hours been extended to deny overtime wages?

Answer:
No. Flexibility in working hours does not affect minimum wage entitlement. Employees working beyond normal hours are eligible for overtime wages at not less than twice the normal rate.

Q9. Are transgender persons excluded from benefits under the Code?

Answer:
No. The Code explicitly prohibits discrimination on the grounds of gender, including transgender persons, in wages, recruitment, and conditions of employment for the same or similar work.

Q10. Does compounding of offences allow employers to escape punishment?

Answer:
No. The Code provides enhanced and deterrent penalties. Compounding is permitted only for the first offence. Repeat offences within five years can result in imprisonment up to three months, fine, or both.

Q11. Are only permanent employees covered under the Code?

Answer:
No. The Code applies to all categories of employees, including full-time, part-time, temporary, casual, and contractual workers.

Q12. Does the Code benefit only organized sector employees?

Answer:
No. The Code applies to employees in both the organized and unorganized sectors, ensuring universal minimum wages and timely wage payments.