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India - Uniform “Code on Wages” replaces individual laws on wages

(GTAI) At the beginning of August India passed a uniform law on wages (Code on Wages), which is intended to reduce the number of Indian labor laws somewhat. The new law replaces four existing laws (Section 69 Code on Wages): the Payment of Wages Act, 1936, the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965, and the Equal Remuneration Act, 1976.

The Code on Wages applies to all employees regardless of their monthly salary - in contrast to the Payment of Wages Act, 1936.

A very significant innovation is that the right to a minimum wage will now apply to all employees in all sectors according to Section 5 Code on Wages.

For the first time, the law also defines uniformly what is meant by “wages” (Section 2 (y) Code on Wages).

According to Section 9 Code on Wages, the central government can in future have a so-called "Floor Wage "- Set a basic wage based on the minimum cost of living - depending on the region.

Section 17 Code on Wages stipulates until when employers have to pay the salary in accordance with the pay period specified in Section 16 (daily, weekly, bi-weekly or monthly). If an employer pays its employees less than required by law, fines of up to 50,000 Indian rupees may result under Section 54 (1) (a) Code on Wages.

Section 26 Code on Wages sets the maximum amount of monthly earnings for the annual bonus payment at the discretion of the respective government.

The Code on Wages will come into effect on a date to be announced by the central government in the official gazette.

On the subject:

  • GTAI module "Wage and Non-Wage Costs - India" (as of May 2019)