Labour Code on Wages Bill

The Labour Code on Wages Bill (Wage Bill) drafted by Ministry of Labour & Employment is an amalgam of the Minimum Wages Act, 1948, the Payment of Wages Act, 1936, the Payment of Bonus Act, 1965 and the Equal Remuneration Act, 1976. It seeks to benefit around 40 crore workers currently working in unorganized sector.

 Aim:

  • Reforming the labour laws and improving the ‘ease of doing business’ ranking.
  • Transforming India into a manufacturing hub through its “Make in India” programme.

Highlights of The Labour Code on Wages Bill :

 

  1. Prohibition of discrimination on ground of gender:
  • The bill seeks to eliminate all forms of discrimination among male, female and transgender employees on the ground of sex in the matter of wages; under the same employer, in respect of work of same or similar nature.
  1. Minimum Wages:
  • Till now the power of wage fixation lies exclusively with the state governments. But this leads to the non-uniformity of wages. The current bill empowers the Centre to issue directions to the State governments in respect of wage fixation to avoid any discrepancy.
  • The bill asks the State Government, to take into account the skill required, the arduousness of the work assigned to the worker, the cost of living of the worker, geographical location of the place of work and other factors while fixing or revising the minimum rates of the wages.
  • The code provides for the constitution of Minimum Wages Advisory Board at both central and the state level to advise the respective governments relating to fixation or revision of minimum wages or matters relating thereto.
  1. Payment of Wages:
  • Payment of Wages Act 1936 required payment of wages primarily in cash, and through banks only upon a specific request by the employee. Post demonetization, the Payment of Wages Act was amended to include payments by cheque or by crediting the wages in the bank account of the employee. The Wage Bill now mandates every employer to make payment of wages electronically (bank transfer) or by cheque unless notified otherwise by the Government.
  1. Inspectors to facilitators:
  • The Wage Bill provides for “facilitators” instead of “inspectors”, who are empowered to provide the employers and workers with advice regarding effective means of complying with the law along with their power of inquiry and investigation.

 

Background:

India has one of the most rigid labour markets in the world. To improve its “Ease of doing business” ranking and to boost its manufacturing sector, which currently accounts for only 16% of India’s $2 trillion economy, India desperately needs some major overhaul in its labour laws.

Realizing the same, the incumbent government has tried introducing one of the biggest legislative reforms in Indian labour laws, by reducing 44 Central labour laws into four codes in order to simplify them. These are :

  • Labour Code on Wages
  • Labour Code on Industrial Relations
  • Labour Code on Social Security & Welfare
  • Labour Code on Safety &Working Conditions

 

To refer to the bill –> CLICK HERE

You may also like to read: Indian Institutes of Management Bill, The Admiralty Bill-2017

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