Code on Wages, 2019
Introduction
The Code on Wages, 2019 amend and consolidate the laws relating to wages, bonus, andmatters incidental thereto.
It amalgamates the following acts:
The Payment of Wages Act, 1936
The Minimum Wages Act, 1948
The Payment of Bonus Act, 1965
The Equal Remuneration Act, 1976
- Uniform definition of ‘wage’ across all labour laws
- Wages include: (a) basic pay, (b) dearness allowance, (c)retaining allowance. Everything else is excluded while computingwages.
- If other allowances exceed more than 50% of the total wages, thenthe amount that exceeds 50% must be counted towards ‘wages’.
- Similarly, the value of any remuneration paid in kind exceeding15% of the wages must be included in the definition of wages.
- The Central Government to fix a National Floor Wage
- Equal pay without any discrimination based on gender
In case of removal, retrenchment, dismissal, and resignation, all duewages to be paid within two working days
Immediate Action
- Review the compensation structure.
- Change the payment and settlement cycle to make it more robust and in compliancewith the new requirements.
- Contractual changes in employment agreements, contracts, and HR policies
For any enquiry, please reach out to us at:
in_labourcodes@pwc.com
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