Major Changes introduced by the Code on Wages, 2019

The Code on Wages, 2019 consists of IX chapters. While the applicability, coverage, definitions an
provisions for equal remuneration are listed in Chapter I, provisions relating to minimum wages are
listed in Chapter II, Chapter III contains provisions relating to payment of wages, Chapter IV deals with
payment of bonus, Chapter V contains provisions relating to constitution of Advisory Board, Chapter
VI deals with the manner of raising claims on wages, provisions relating to appointment of an
Inspector-cum-Facilitator are set out in Chapter VII, Chapter VIII lists out the offences and penalties
and lastly Chapter IX deals with miscellaneous provisions.

S.No Old Statutes Code on Wages

1. The Equal Remuneration Act, 1976 recognised The Wage Code (“WC”) allowed a third
only male and female employees in respect of category of gender, i.e. Transgenders to also
which discrimination was prohibited. be protected from discrimination in matters
of payment of remuneration for carrying out
same or similar work.
2. Minimum Wages Act, 1948 (“MWA”) was only The WC extends its coverage to all
applicable to the scheduled employments set employments, irrespective of whether they
out therein. are in the organized or the unorganized
sector.
3. Payment of Wages Act, 1936 (“PWA”) was The WC covers all employees irrespective of
applicable to employees earning not more than their monthly salary.
INR 24,000 (Indian Rupees Twenty-Four
Thousand only) per month.
4. PWA was only applicable to 'industrial or other WC uses the term 'establishment' which
establishments'. The statute defined 'industrial means 'any place where any industry, trade,
or other establishment' to mean business, manufacture or occupation is
establishments relating to motor transport or carried on', thus extending the application
air transport services, dock, wharf, jetty, inland of the chapter on payment of wages to
vessel, mine, quarry, oilfield, plantation, commercial establishments as well.
production or manufacture of articles for their
use / transport / sale, construction /
development / maintenance of buildings etc.,
and any other establishment which the
appropriate government may, having regard to
the nature thereof and other relevant
circumstances, specify. This means that for the
PWA to be applicable to shops and
establishments, the appropriate government
must issue a notification to that effect.
5. Payment of Bonus Act, 1965 was only Under the WC, it is up to the discretion of
applicable to workers earning wages up to INR the appropriate government to prescribe
21,000 (Indian Rupees Twenty-One Thousand the wage ceiling for eligibility of payment of
only) per month. bonus.
6. Under the MWA, the respective state As per the WC, the Central Government shall
governments were responsible for fixing and fix a 'floor wage' taking account the
notifying the basic rate of wages for the minimum living standards of a worker.
workers employed in the scheduled However, the Central Government may
establishments. prescribe different floor wages for different
geographical areas. The respective state
governments may fix a different minimum

7. The criteria for fixing the minimum wage rate is
not elaborated under the MWA.
8. The former labour laws authorized labour
‘inspectors’ to carry out inquiry and
investigation into alleged contraventions of the
stipulated provisions.
9. In the former laws there was no provision for
compounding of offences.
10 Under the former laws, the maximum fine
imposed by the labour authorities for the
contravention of the relevant provisions was
from INR 500 (Indian Rupees Five Hundred
wage for areas falling under their
jurisdiction, provided such wage should at
least match the Floor Wage.
WC has provided certain guidelines to the
appropriate governments for the purpose of
fixing / revising the minimum wage rate,
which include the skill required, the
arduousness of the work assigned to the
worker, the cost of living of the worker, and
the geographical location of the place of
work.
The WC introduces the concept of
‘inspector-cum-facilitator’ who shall not
only carry out inspections, but also provide
employers and workers with information on
how to improve their compliance with the
law. While the inspector-cum-facilitator
retains the labour inspector’s power to
examine the workplace, search and seize
copies of relevant documents, the WC, also
states that before initiation of prosecution
for any non-compliance, the inspector-cum-
facilitator would provide an opportunity to
the employer to comply with the provisions
of the WC.
The WC has introduced a provision for
compounding of offences which states that,
any offence punishable under the Code, not
being an offence punishable with
imprisonment only, or with imprisonment
and also with fine, may, on an application of
the accused person, either before or after
the institution of any prosecution, be
compounded by a Gazetted Officer, as the
appropriate Government may, by
notification, specify, for a sum of 50 (fifty)
per cent. of the maximum fine provided for
such offence, in the manner as may be
prescribed.
However, such an opportunity is unavailable
to an employer for the second time or
thereafter within a period of 5 (five) years
from the date of either:
(i) commission of a similar offence which
was earlier compounded; or (ii) commission
of a similar offence for which such person
was earlier convicted.
The WC states that for any failure to pay the
sums due to the employee, the employer
shall be punishable with fine which may
extend to INR 50,000 (Indian Rupees Fifty
 only) to INR 20,000 (Indian Rupees Twenty Thousand only), while for any failure to
Thousand only). comply with other provisions of the WC, the
employer shall be punishable with fine
which may extend to INR 20,000 (Indian
Rupees Twenty Thousand only).
11. Under the former labour laws the limitation The WC increased the period of limitation to
period for filing of claims in relation to payment 3 (three) years.
of any sums due was between 6 (six) months to
2 (two) years.