The Lok Sabha, on Tuesday, passed the Code on Wages Bill, 2019 enabling Centre to fix minimum statutory wage for the entire country, a move that will benefit 500 million workers. This is the first in series of the four labour codes that the ministry of labour and employment is working on to rationalise labour laws and improve the ease of doing business. The bill will now be tabled in Rajya Sabha for passage following which it will be enacted.
The minimum wages fixed by the Centre will no longer be based on employment but on geography and skills. Labour minister Santosh Gangwar has also tabled the labour code on occupational safety, health and working condition in the lower house for consideration and passing in the ongoing monsoon session.
The push to amalagamation of labour laws, which has been in works for over four years now, comes on back of finance minister Nirmala Sitharaman’s budget statement in which she had said government has proposed streamlining multiple labour laws into a set of four labour codes. “This will ensure that process of registration and filing of returns will get standardised and streamlined. With various labour related definitions getting standardised, it is expected that there shall be less dispute,” she had said in her maiden Budget speech.
The Code on Wages seeks to universalise the provisions of minimum wages and timely payment of wages to all employees, irrespective of the sector and wage ceiling. Introduction of statutory floor wage under the bill will be computed on the basis of minimum living conditions and will extend quality living conditions across the country to about 500 million workers. It is envisaged that states will notify payment of wages to workers through digital mode. This bill was earlier introduced in the Lok Sabha in 2017 and was referred to the parliamentary standing committee, which submitted its report in December 2018. However, the bill lapsed following dissolution of the 16th Lok Sabha.
Under the code on wages, the labour ministry plans to streamline the definition of wages by amalgamating four wage-related statutes. These include the Minimum Wages Act, 1948, the Payment of Wages Act, 1936, the Payment of Bonus Act, 1965, and the Equal Remuneration Act, 1976. At present, there are about half a dozen definitions of wages in various acts across the Centre and states, which employers have to grapple with. Labour ministry has decided to amalgamate 44 labour laws into four codes that include —code on wages, code on industrial relations, code on social security and code on safety, health and working conditions. Of the four codes, the labour code on wages will be the first and probably the simplest of all to be laid in Parliament. The bill is unlikely to face any resistance considering its nature.
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