Code of Wages Bill, 2019

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The Lok Sabha on Tuesday passed the CODE ON WAGES BILL, 2019 which was later passed by the Rajya Sabha on the coming Friday. This Code on wages bill was specifically constructed to deal with the wage incongruence between the two genders and administer the wage payments done to employees of all sectors including agriculture, banking, manufacturing etc. This code shall do so by introducing a minimum wage for every worker, which would be different in each geographical area. Currently this bill is in the process to receive presidential assent to become an act.

This bill was tabled by the Labour and employment minister Santosh Kumar Gangwar on the 23rd of July 2019, with the additional objective to also deal with the delay of the payment of employees and their bonuses. Initially the first bill was first introduced in LOK SABHA on August 10, 2017 and referred to the parliamentary standing committee for recommendations, but after the dissolution of the 16th Lok Sabha the bill had lapsed. However out of 24 recommendations, 17 of them were accepted by the current government while drafting the bill. 

Additionally this bill is the first labor code of its kind which integrates the four existing labor laws in the country in order “to streamline the definition of wages”[1], and make labor legislation much efficient. Those labor laws include The Minimum Wages Act, 1948, Payment of Wages Act,1936, Payment of Bonus Act 1965, and Equal Remuneration Act 1976.

The tripartite committee consisting of representatives of trade unions, employers and the state government shall be fixing a floor wage based on the standard of living of the workers and below which no minimum wage shall be decided. Both the minimum wages and the floor wages shall be different for different geographical areas. The minimum wages shall be determined by the central or state government who shall be advised by the separate central and state advisory boards, established under this code. The objective of such boards shall be to also provide additional employment opportunities for women. Moreover the determinants of the minimum wages formulated shall be “(i) skill of workers, and (ii) difficulty of work assigned to them.”[2]Apart from establishing minimum wages, under this code the grounds for deduction of an employee’s wage is also illustrated, which include fines,  absence from duty, recovery of advances given to employee etc. It is specified that the deductions should not exceed 50% of the wage designated.

The code outlines the penalties for the offences committed by an employer under this code. Those offences include non abidance to any provision of this code including paying lower wages than specified. The highest penalty mentioned is imprisonment for 3 months maximum along with fine of 1 lakh rupees or less.

During the discussions held in the house, this bill witnessed support of 85members and resistance from only 8 members of the Rajya Sabha. The supporters of this bill argue that through this bill nearly 500 million workers in India including the “unorganized sector workers like painters, agricultural workers etc”[3] shall receive legislative support of minimum wages. They also highlight that the clause 3 of this bill condemns gender discrimination on the basis of wages for the work same or similar in nature which is evident of the potential this bill has to improve women labor force participation rate across the country. However, the opposing members, including Congress member K Suresh[4]  pointed out that this bill will act as a medium to invoke labor unrest in the industrial environment.

Even, RSS-affiliated trade union Bhartiya Mazdoor Sangh (BMS)[5] while opposing the bill stated that it was a bias towards the corporate benefit and was not designed for the workers, calling it anti worker bill.

In conclusion, it can be deducted, that this bill was a major labor reformation step introduced by the government for the advancement of the labor force of the country through universalizing the minimum wage for the employed. However such laws tend to restrict highly productive employees to a confined wage rate rather than a generous one. Hence, concrete strategic planning of the consequences of the bill shall prove to be more effectual.

References

[1] https://economictimes.indiatimes.com/news/economy/policy/rajya-sabha-passes-wage-code-bill/articleshow/70501009.cms?from=mdr

[2] http://www.prsindia.org/billtrack/code-wages-2019

[3] https://economictimes.indiatimes.com/news/economy/policy/rajya-sabha-passes-wage-code-bill/articleshow/70501009.cms?from=mdr

[4] https://www.business-standard.com/article/pti-stories/wage-code-bill-to-ensure-minimum-wage-for-every-worker-gangwar-119073001024_1.html

[5] https://www.business-standard.com/article/pti-stories/wage-code-bill-to-ensure-minimum-wage-for-every-worker-gangwar-119073001024_1.html