Implementation of the Code on Wages Act, 2019

The Union Labour and Employment Ministry published the draft rules framed for the implementation of the Code on Wages Act, 2019, that guarantees minimum wages to all, defines how the wages will be calculated and prescribes a national floor wage for all States.

The Code on Wages was the first of the four codes proposed by the government as a part of its labour law reforms that was passed by Parliament in August 2019.

It subsumes the Payment of Wages Act, 1936, the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965 and the Equal Remuneration Act, 1976.

According to the draft rules, the basis for calculating the minimum wage would be a standard working class family of one earning worker, a spouse and two children, a net intake of 2,700 calories per day each, 66 metres of cloth per year, rent expenditure equal to 10% of the food and clothing expenditure, fuel, electricity and other miscellaneous expenses of 20% of minimum wage and expenditure on children’s education, medical care, recreation and contingencies amounting to 25% of minimum wage.

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