The code on wages is a proposed legislation to amend & consolidate laws relating to wages & bonus.
“Wages” is defined in the section 2(y) of the code. Wages are paid to a person employed for their work or services rendered in that employment. Specifically, this includes all remuneration provided in the form of salary, allowances, or other benefits, whether paid in money or capable of being calculated in monetary terms. Moreover, wages become payable when the terms of employment—whether express or implied—are fulfilled.
The code prohibits the discrimination on the ground of gender by the same employer, in respect of the same work or of a similar nature. Wages include basic pay, dearness allowance & retaining allowance. It does not include :
- Bonus which is not a part of renumeration
- Value of house accommodation, medical attendance or any other amenity or service excluded from the computation of wages by appropriate government.
- Contribution by employer to any pension fund or PF.
- Conveyance Allowance
- Sum paid by employer to cover special expenses due to nature of employment
- House Rent Allowance
- Renumeration payable under award/settlement between parties or order of a court of tribunal.
- Overtime Allowance
- Commission Payable
- Gratuity payable on termination
- Retrenchment Compensation or Retirement Benefit or any Ex Gratia Payment
Chapter 2 : Minimum Wages
This chapter talks about the payment, fixation, components & other aspects about minimum wages. Subject to the floor wages fixed by central government, the minimum rate of wages shall be fixed by the appropriate government. No employer shall pay less than the minimum rate of wages.
Minimum wages can be based on time work or piece work. The wage period for the calculation of wages on time work basis will be by hour, by day or by month. Appropriate government may fix the number of hours to constitute normal working day, provide for a day of rest in every period of 7 days and payment for work on the day of rest as well. Appropriate government while deciding the minimum wages:
- Primarily take account of the skill
- For certain category of workers, may take into account the arduousness of work.
- Norms of fixation of minimum wages as prescribed.
Procedure : Appropriate government can either appoint committees to hold enquiries & recommendations Or publish its proposals by the way of notification for the purpose of fixation of minimum wages.
Components : Minimum wages may consist of
- Basic Rate of wages + Cost of living Allowance
- Basic Rate of wages (With or without Cost of living Allowance) + Cash Value of concessions of essential commodities.
- Basic Rate + Cost of living Allowance + Cash Value of concessions. (All Inclusive Rate)
An employee who has not worked the requisite number of hours, and whose employer has fixed his minimum wages by the day, shall be entitled to full wages. However, the employer will not pay him for the full day unless he did not work due to his unwillingness to work or other prescribed cases and circumstances.
Overtime : Employer shall pay for the excess hours worked by the employee at an overtime rate which should not be less than twice the normal rate of wages.
