Existing Framework: The Labour Laws of the country were governed majorly by a set of laws i.e. Payment of Wages Act, 1936, Minimum Wages Act, 1948, Payment of Bonus Act, 1965 and Equal Remuneration Act, 1976.

Legal Update: The Ministry of Labour and Employment through the Labour Minister Mr. Santosh Gangwar presented the Code on Wages Bill, 2019 in Lok Sabha on July 23, 2019. The Bill was passed in Lok Sabha on July 30, 2019 and was also passed by Rajya Sabha on August 02, 2019. The President gave its assent to the Code on August 08, 2019.

Highlights of the Bill:

  • The Code on Wages, 2019 will replace the Payment of Wages Act 1936, Minimum Wages Act 1948, Payment of Bonus Act 1965 and Equal Remuneration Act 1976.
  • The Code shall apply to all employees.
  • The Code provides that the Central Government will fix minimum wages for certain sectors including railway and mines.
  • The State government would be free to set minimum wages for all the other category of employments.
  • The Code also provides to set up a minimum wage which must be higher than the floor wage. The concept of floor wage has also been given in the Act. This shall be decided by taking into account various factors like living conditions of workers etc. The central government can set a separate minimum wage for different regions or states.
  • The minimum wage would be revised every five-years.

Key Inference: This is the first Code proposed in the series of four codes to be proposed by the government towards labour reform in the country. The lowest pay permitted by law will now be on the basis of condition of work and their efficiency and will not merely be fixed by the Centre. It’s a welcomed move by the Government to consolidate and renovate our archaic labour laws.


August 8th, 2019