| HRD / Labour / Health
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The Code on Wages, 2017
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Highlights of the Code
- The Code replaces four existing laws: (i) the Payment of Wages Act, 1936, (ii) the Minimum Wages Act, 1948, (iii) the Payment of Bonus Act, 1965, and (iv) the Equal Remuneration Act, 1976.
- The central government will set minimum wages for certain employments including railways, and mines. State governments will set minimum wages for all other employments.
- The Code provides that a national minimum wage may be set by the central government. States cannot set minimum wages lower than the national minimum wage. Further, the central government may set separate national minimum wages for different states or regions of the country.
- Minimum wages must be revised by the central or state governments at an interval of five years.
- The overtime rate will be at least twice the normal rate of wages of the employee.
Key Issues and Analysis
- Central government may set a national minimum wage. Further, it may set separate national minimum wages for different states or regions. In this context, two questions arise: (i) the rationale for a national minimum wage, and (ii) whether the central government should set one or multiple national minimum wages.
- States have to ensure that minimum wages set by them are not lower than the national minimum wage. If existing minimum wages set by states are higher than the national minimum wage, they cannot reduce the minimum wages. This may affect the ability of states to reduce their minimum wages if the national minimum wage is lowered.
- The time period for revising minimum wages will be set at five years. Currently, state governments have flexibility in revising minimum wages, as long as it is not more than five years. It is unclear why this flexibility has been removed, and five years has been set for revision.
- The Equal Remuneration Act, 1976, prohibits employers from discriminating in wage payments as well as recruitment of employees based on gender. While the Code prohibits gender discrimination on wage-related matters, it does not include provisions regarding discrimination during recruitment.
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| Current Status: Pending |
| Ministry: Labour and Employment |
| Stage | Date |
| Introduction | Aug 10, 2017 |
| Com. Ref. | Aug 21, 2017 |
| Com. Rep. | Extension upto the end of Winter Session 2018 |
| Lok Sabha | Introduced |
| Rajya Sabha | |
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| Parliamentary panel finalises report on Wage Code Bill, says Gangwar, Economic Times, May 01, 2018
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| Law Ministry’s ‘move’ to exclude transgender persons from wage code Bill decried, Business Line, Sep 14, 2017
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| Code on Wages Bill and dream of jobs-for-all, Free Press Journal, Sep 07, 2017
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| Minimum wage code bill 2017: Base pay will differ for states and geographical areas, Business Today, Sep 05, 2017
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| The Code Of Wages Bill, Shillong Times, Aug 29, 2017
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| Minimum wage to vary across states, Hindu, Aug 29, 2017
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| Avoidable row on New Wages Bill, Telangana Today, Aug 28, 2017
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| Having a minimum wage law is a mistake, Live Mint, Aug 16, 2017
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| Bill to fix minimum wage for unorganised sector introduced in Lok Sabha, Economic Times, Aug 10, 2017
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