Cabinet approves bill to codify labour laws, increase protection of minimum wage

The Union Cabinet on Wednesday approved the introduction of a bill that will codify relevant provisions of four existing laws and intends to increase the legislative protection of minimum wage to the entire workforce.

Sources said The Codes on Wages Bill, 2019 will be introduced in the ongoing Budget Session of parliament and would benefit about 50 crore workers.

They said the codification proposes to simplify 32 central labour laws into four codes to bring them in sync with the emerging economic situation, facilitate easier compliance by establishments, promote ease of living and ensure labour welfare and wage and social security for workers.

The Code of Wages Bill is the first in the series of four labour codes. It seeks to subsume relevant provisions of The Minimum Wages Act, 1948, Payment of Wages Act 1936, Payment of Bonus Act Act, 1965 and Equal Remuneration Act 1976.

Sources said many states have multiple minimum wages and the code simplifies it by doing away with the type of employment as one of the criteria. There are 2000 rates of minimum wages and the code reduces the number substantially. The fixation of the minimum wage will primarily be based on geography and skills.

Many changes have also been introduced in inspection regimes such as web-based random computerised inspection scheme, jurisdiction-free inspections and calling for information electronically.

It universalises the provision of minimum wages and timely payment of wages to all employees irrespective of sector or wage ceiling.

At present, the provisions of the Minimum Wages Act and Payment of Wages Act apply on workers below a particular wage ceiling working in scheduled employments only.

Sources said the code would ensure the right of sustenance of every worker and intends to increase the legislative protection of minimum wage from existing 40 per cent to 100 per cent of the workforce.

They said the bill would ensure that every worker gets minimum wage. A statutory floor wage would be introduced, which will be computed based on minimum living conditions.

The states would notify the payment of wages to workers through digital mode.

The definition of wages, now different under different labour laws, has been simplified to reduce litigation and will entail a lesser cost of compliance for an employer and the rules to be framed would prescribe one template.

The changes, sources said, will bring transparency and accountability and the bill was a step for ensuring statutory protection of minimum wage.

They said that the limitation period has been increased to three years and made a uniform for filing claims such as for minimum wages, bonus, equal remuneration as against existing varying period of eight months to two years.

The Code of Wages Bill was introduced in the Lok Sabha on August 10, 2017, and referred to the Standing Committee which gave its report in December 2018. The bill lapsed due to the dissolution of 16th Lok Sabha.

The sources said a new bill has been drafted considering the recommendations of the Standing Committee and suggestions of stakeholders.