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CODE ON WAGES, 2019
An Act to amend and consolidate the laws relating to wages and bonus and matters connected therewith or incidental thereto. BE it enacted by Parliament in the Seventieth Year of the Republic of India as follows:
The "Pre." section of the Code on Wages, 2019 (hereafter referred to as the "Code") sets the preliminary provisions and definitions that underpin the entire legislation. It aims to streamline and consolidate previous wage-related laws into a comprehensive framework, ensuring uniformity and clarity in wage regulation across sectors.
The preamble and preliminary sections typically define key terms, scope, and objectives of the Code. They emphasize the importance of fair wages, timely payments, and penalties for non-compliance. The section also highlights the authority of appropriate government bodies to enforce provisions and impose penalties.
The scope encompasses:- All employers and employees across sectors, regardless of wage ceiling.- Regulation of wages, bonus, and related payments.- Applicability to both organized and unorganized sectors.- Establishment of minimum wages and timely wage payments as fundamental rights.- Enforcement mechanisms through authorities empowered to impose penalties.
Penalties for violations under the Code include:- Fine up to Rs. 50,000 for non-compliance, with higher penalties for repeat offences within five years, including imprisonment up to three months or fines up to Rs. 1 lakh, or both .
Note: The references are based on the provided sources, primarily , which extensively discuss penalties, scope, and enforcement provisions under the Code on Wages, 2019.
(1) This Act may be called the Code on Wages, 2019.
(2) It extends to the whole of India.
(3) It shall come into force on such date as the Central Government may, by notification in the Official Gazette appoint; and different dates may be appointed for different provisions of this Code and any reference in any such provision to the commencement of this Cod
In this Code, unless the context otherwise requires
(a) "accounting year" means the year commencing on the 1st day of April ;
(b) "Advisory Board" means the Central Advisory Board or, as the case may be, the State Advisory Board, constituted under section 42;
(c) "agricultural income t
(1) There shall be no discrimination in an establishment or any unit thereof among employees on the ground of gender in matters relating to wages by the same employer, in respect of the same work or work of a similar nature done by any employee.
(2) No employer shall,—
(i) for the purposes of complying with the provisions of sub-section (1), reduce the ra
Where there is any dispute as to whether a work is of same or similar nature for the purposes of section 3, the dispute shall be decided by such authority as may be notified by the appropriate Government.
No employer shall pay to any employee wages less than the minimum rate of wages notified by the appropriate Government.
(1) Subject to the provisions of section 9, the appropriate Government shall fix the minimum rate of wages payable to employees in accordance with the provisions of section 8.
(2) For the purposes of sub-section (1), the appropriate Government shall fix a minimum rate of wages ––
(a) for time work; or
(1) Any minimum rate of wages fixed or revised by the appropriate Government under section 8 may consist of––
(a) a basic rate of wages and an allowance at a rate to be adjusted, at such intervals and in such manner as the appropriate Government may direct, to accord as nearly as practicable with the variation in the cost of living index number applicable to such workers (hereinafter referred to as "cost of living allowance"); or
(1) In fixing minimum rates of wages for the first time or in revising minimum rates of wages under this Code, the appropriate Government shall either—
(a) appoint as many committees as it considers necessary to hold enquiries and recommend in respect of such fixation or revision, as the case may be; or
(b) by notification publish its proposals for the in
(1) The Central Government shall fix floor wage taking into account minimum living standards of a worker in such manner as may be prescribed:
Provided that different floor wage may be fixed for different geographical areas.
(2) The minimum rates of wages fixed by the appropriate Government under section 6shall not be less than the floor wage and if the mi
If an employee whose minimum rate of wages has been fixed under this Code by the day works on any day on which he was employed for a period of less than the requisite number of hours constituting a normal working day, he shall, save as otherwise hereinafter provided, be entitled to receive wages in respect of work done on that day, as if he had worked for a full normal working day:
Provided that he shall not be entitled to receive wages
Where an employee does two or more classes of work to each of which a different minimum rate of wages is applicable, the employer shall pay to such employee in respect of the time respectively occupied in each such class of work, wages at not less than the minimum rate in force in respect of each such class.
Where a person is employed on piece work for which minimum time rate and not a minimum piece rate has been fixed under this Code, the employer shall pay to such person wages at not less than the minimum time rate.
(1) Where the minimum rates of wages have been fixed under this Code, the appropriate Government may —
(a) fix the number of hours of work which shall constitute a normal working day inclusive of one or more specified intervals;
(b) provide for a day of rest in every period of seven days which shall be allowed to all employees or to any specified class o
Where an employee whose minimum rate of wages has been fixed under this Code by the hour, by the day or by such a longer wage-period as may be prescribed, works on any day in excess of the number of hours constituting a normal working day, the employer shall pay him for every hour or for part of an hour so worked in excess, at the overtime rate which shall not be less than twice the normal rate of wages.
All wages shall be paid in current coin or currency notes or by cheque or by crediting the wages in the bank account of the employee or by the electronic mode:
Provided that the appropriate Government may, by notification, specify the industrial or other establishment, the employer of which shall pay to every person employed in such industrial or other establishment, the wages only by cheque or by crediting the wages in his bank account
The employer shall fix the wage period for employees either as daily or weekly or fortnightly or monthly subject to the condition that no wage period in respect of any employee shall be more than a month:
Provided that different wage periods may be fixed for different establishments.
(1) The employer shall pay or cause to be paid wages to the employees, engaged on—
(i) daily basis, at the end of the shift;
(ii) weekly basis, on the last working day of the week, that is to say, before the
weekly holiday;
(1) Notwithstanding anything contained in any other law for the time being in force, there shall be no deductions from the wages of the employee, except those as are authorised under this Code.
Explanation.–– For the purposes of this sub-section,—
(a) any payment made by an employee to the employer or his agent shall be deemed to be a deduction from his
(1) No fine shall be imposed on any employee save in respect of those acts and omissions on his part as the employer, with the previous approval of the appropriate Government or of such authority as may be prescribed, may have specified by notice under sub-section (2).
(2) A notice specifying such acts and omissions shall be exhibited in such manner as may be prescribed, on the premises in which the employment is carried on.
(1) Deductions may be made under clause (b) of sub-section (2) of section 18 only on account of the absence of an employee from the place or places where by the terms of his employment, he is required to work, such absence being for the whole or any part of the period during which he is so required to work.
(2) The amount of such deduction shall in no case bear to the wages payable to the employed person in respect of the wage-period fo
(1) A deduction under clause (c) or clause (n) of sub-section (2) of section 18 for damage or loss shall not exceed the amount of the damage or loss caused to the employer by negligence or default of the employee.
(2) A deduction shall not be made under sub-section (1) until the employee has been given an opportunity of showing cause against the deduction or otherwise than in accordance with such procedure as may be prescribed for the m
A deduction under clause (d) or clause (e) of sub-section (2) of section 18 shall not be made from the wages of an employee, unless the house-accommodation amenity or service has been accepted by him as a term of employment or otherwise and such deduction shall not exceed an amount equivalent to the value of the house-accommodation amenity or service supplied and shall be subject to such conditions as the appropriate Government may impose.
Deductions under clause (f) of sub-section (2) of section 18 for recovery of advances given to an employee shall be subject to the following conditions, namely:––
(a) recovery of advance of money given to an employee before the employment began shall be made from the first payment of wages to him in respect of a complete wage-period but no recovery shall be made of such advances given for travelling expenses;
Deductions under clause (g) of sub-section (2) of section 18 for recovery of loans granted to an employee, regulating the extent to which such loans may be granted and the rate of interest payable thereon, shall be such as may be prescribed.
The provisions of this Chapter shall not apply to the Government establishments unless the appropriate Government, by notification, applies such provisions to the Government establishments specified in the said notification.
(1) There shall be paid to every employee, drawing wages not exceeding such amount per mensem, as determined by notification, by the appropriate Government, by his employer, who has put in at least thirty days work in an accounting year, an annual minimum bonus calculated at the rate of eight and one-third per cent. of the wages earned by the employee or one hundred rupees, whichever is higher whether or not the employer has any allocable surplus during the previous accounting year.
Where an employee has not worked for all the working days in an accounting year, the minimum bonus under sub-section (1) of section 26, if such bonus is higher than eight and one third per cent. of the salary or wage of the days such employee has worked in that accounting year, shall be proportionately reduced.
For the purposes of section 27, an employee shall be deemed to have worked in an establishment in any accounting year also on the days on which,––
(a) he has been laid off under an agreement or as permitted by standing orders under the Industrial Employment (Standing Orders) Act, 1946(20 of 1946), or under the Industrial Disputes Act, 1947(14 of 1947), or under any other law applicable to the establishment;
Notwithstanding anything contained in this Code, an employee shall be disqualified from receiving bonus under this Code, if he is dismissed from service for ––
(a) fraud; or
(b) riotous or violent behaviour while on the premises of the establishment; or
(c) theft, misapprop
Where an establishment consists of different departments or undertakings or has branches, whether situated in the same place or in different places, all such departments or undertakings or branches shall be treated as parts of the same establishment for the purpose of computation of bonus under this Code:
Provided that where for any accounting year a separate balance-sheet and profit and loss account are prepared and maintained in respe
(1) The bonus shall be paid out of the allocable surplus which shall be an amount equal to sixty per cent. in case of a banking company and sixty-seven per cent. in case of other establishment, of the available surplus and the available surplus shall be the amount calculated in accordance with section 33.
(2) Audited accounts of companies shall not normally be questioned.
The gross profits derived by an employer from an establishment in respect of the accounting year shall,––
(a) in the case of a banking company, be calculated in the manner as may be prescribed by the Central Government;
(b) in any other case, be calculated in the manner as may be prescribed by the Central Government.
The available surplus in respect of any accounting year shall be the gross profits for that year after deducting therefrom the sums referred to in section 34:
Provided that the available surplus in respect of the accounting year commencing on any day in a year after the commencement of this Code and in respect of every subsequent accounting year shall be the aggregate of—
The following sums shall be deducted from the gross profits as prior charges, namely:—
(a) any amount by way of depreciation admissible in accordance with the provisions of sub-section (1) of section 32 of the Income-tax Act or in accordance with the provisions of the agricultural income-tax law, for the time being in force, as the case may be;
(b) subje
For the purposes of this Code, any direct tax payable by the employer for any accounting year shall, subject to the following provisions, be calculated at the rates applicable to the income of the employer for that year, namely:—
(a) in calculating such tax no account shall be taken of,––
(i) any loss incurred by the employer in respect of any previous ac
(1) Where for any accounting year, the allocable surplus exceeds the amount of maximum bonus payable to the employees in the establishment under section 26, then, the excess shall, subject to a limit of twenty per cent. of the total salary or wage of the employees employed in the establishment in that accounting year, be carried forward for being set on in the succeeding accounting year and so on up to and inclusive of the fourth accounting year to be utilised for the purpose of payment of bonus in such manner as may b
Where in any accounting year,—
(a) an employer has paid any puja bonus or other customary bonus to employee; or
(b) an employer has paid a part of the bonus payable under this Code to an employee before the date on which such bonus becomes payable, then, the employer shall be entitled to deduct the amount of bonus so paid from the amount of bonus payable b
Where in any accounting year, an employee is found guilty of misconduct causing financial loss to the employer, then, it shall be lawful for the employer to deduct the amount of loss from the amount of bonus payable by him to the employee under this Code in respect of that accounting year only and the employee shall be entitled to receive the balance, if any.
(1) All amounts payable to an employee by way of bonus under this Code shall be paid by crediting it in the bank account of the employee by his employer within a period of eight months from the close of the accounting year:
Provided that the appropriate Government or such authority as the appropriate Government may specify in this behalf may, upon an application made to it by the employer and for sufficient reasons, by order, extend the
(1) If in any accounting year an establishment in public sector sells any goods produced or manufactured by it or renders any services, in competition with an establishment in private sector, and the income from such sale or services or both, is not less than twenty per cent. of the gross income of the establishment in public sector for that year, then, the provisions of this Chapter shall apply in relation to such establishment in public sector as they apply in relation to a like establishment in private sector.
<(1) Nothing in this Chapter shall apply to–– (a) employees employed by the Life Insurance Corporation of India;
(b) seamen as defined in clause (42) of section 3 of the Merchant Shipping Act, 1958(44 of 1958.);
(c) employees registered or listed under any scheme made under the Dock Workers (Regulation of Employment) Act, 1948(9 of 1948.), and emplo
(1) The Central Government shall constitute the Central Advisory Board which shall consist of persons to be nominated by the Central Government—
(a) representing employers;
(b) representing employees which shall be equal in number of the members specified in clause (a);
(c)
Every employer shall pay all amounts required to be paid under this Code to every employee employed by him:
Provided that where such employer fails to make such payment in accordance with this Code, then, the company or firm or association or any other person who is the proprietor of the establishment, in which the employee is employed, shall be responsible for such payment.
(1) Subject to the other provisions of this Code, all amounts payable to an employee under this Code shall, if such amounts could not or cannot be paid on account of his death before payment or on account of his whereabouts not being known,—
(a) be paid to the person nominated by him in this behalf in accordance with the rules made under this Code; or
(b
(1) The appropriate Government may, by notification, appoint one or more authorities, not below the rank of a Gazetted Officer, to hear and determine the claims which arises under the provisions of this Code.
(2) The authority appointed under sub-section (1), while deciding the claim under that sub-section, may order, having regard to the circumstances under which the claim arises, the payment of compensation in addition to the claim de
Notwithstanding anything contained in this Code, where any dispute arises between an employer and his employees with respect to—
(a) fixation of bonus or eligibility for payment of bonus under the provisions of this Code; or
(b) the application of this Code, in respect of bonus, to an establishment in public sector, then, such dispute shall be deemed to
(1) Where, during the course of proceedings before—
(a) the authority under section 45; or
(b) the appellate authority under section 49; or
(c) a Tribunal; or
(d) an arbitrator referred to in
(1) Where any claim, dispute or appeal with respect to bonus payable under this Code between an employer, not being a corporation or a company, and his employees is pending before any authority, appellate authority, Tribunal or arbitrator, as the case may be, as referred to in sub-section (1) of section 47 and the accounts of such employer audited by any auditor duly qualified to act as auditor of companies under the provisions of section 141 of the Companies Act, 2013(18 of 2013), are produced before such authority, a
(1) Any person aggrieved by an order passed by the authority under sub-section (2) of section 45 may prefer an appeal, to the appellate authority having jurisdiction appointed by the appropriate Government, by notification, for such purpose, within ninety days from the date of such order, in such form and manner as may be prescribed:
Provided that the appellate authority may entertain the appeal after ninety days if it satisfied that th
(1) Every employer of an establishment to which this Code applies shall maintain a register containing the details with regard to persons employed, muster roll, wages and such other details in such manner as may be prescribed.
(2) Every employer shall display a notice on the notice board at a prominent place of the establishment containing the abstract of this Code, category-wise wage rates of employees, wage period, day or
(1) The appropriate Government may, by notification, appoint Inspector-cum-Facilitators for the purposes of this Code who shall exercise the powers conferred on them under sub-section (4) throughout the State or such geographical limits assigned in relation to one or more establishments situated in such State or geographical limits or in one or more establishments, irrespective of geographical limits, assigned to him by the appropriate Government, as the case may be.
(1) No court shall take cognizance of any offence punishable under this Code, save on a complaint made by or under the authority of the appropriate Government or an officer authorised in this behalf, or by an employee or a registered Trade Union registered under the Trade Unions Act, 1926(16 of 1926) or an Inspector-cum-Facilitator.
(2) Notwithstanding anything contained in the Code of Criminal Procedure, 1973(2 of 1974), no court infer
(1) Notwithstanding anything contained in section 52, for the purpose of imposing penalty under clauses (a) and (c) of sub-section (1) and sub-section (2) of section 54 and sub-section (7) of section 56, the appropriate Government may appoint any officer not below the rank of Under Secretary to the Government of India or an officer of equivalent rank in the State Government, as the case may be, for holding enquiry in such manner, as may be prescribed by the Central Government.
(1) Any employer who—
(a) pays to any employee less than the amount due to such employee under the provisions of this Code shall be punishable with fine which may extend to fifty thousand rupees;
(b) having been convicted of an offence under clause (a) is again found guilty of similar offence under this clause, within five years from the date of the comm
(1) If the person committing an offence under this Code is a company, every person who, at the time the offence was committed was in charge of, and was responsible to the company for the conduct of business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:
Provided that nothing contained in this sub-section shall render any such perso
(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973(2 of 1974), any offence punishable under this 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 fifty per cent. of the maximum fine provided for such offence, in the manner as
No court shall entertain any suit for the recovery of minimum wages, any deduction from wages, discrimination in wages and payment of bonus, in so far as the sum so claimed—
(a) forms the subject of claims under section 45;
(b) has formed the subject of a direction under this Code;
No suit, prosecution or any other legal proceeding shall lie against the appropriate Government or any officer of that Government for anything which is in good faith done or intended to be done under this Code.
Where a claim has been filed on account of non-payment of remuneration or bonus or less payment of wages or bonus or on account of making deductions not authorised by this Code from the wages of an employee, the burden to prove that the said dues have been paid shall be on the employer.
Any contract or agreement whereby an employee relinquishes the right to any amount or the right to bonus due to him under this Code shall be null and void in so far as it purports to remove or reduce the liability of any person to pay such amount under this Code.
The provisions of this Code shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in the terms of any award, agreement, settlement or contract of service.
The appropriate Government may, by notification, direct that any power exercisable by it under this Code shall, in relation to such matters and subject to such conditions, if any, as may be specified in the notification, be also exercisable—
(a) where the appropriate Government is the Central Government, by such officer or authority subordinate to the Central Government or by the State Government or by such officer or authority subordin
Where an employer is charged with an offence under this Code, he shall be entitled upon complaint duly made by him, to have any other person whom he charges as the actual offender, brought before the court at the time appointed for hearing the charge; and if, after the commission of the offence has been proved, the employer proves to the satisfaction of the court—
(a) that he has used due diligence to enforce the execution of this Code;
Any amount deposited with the appropriate Government by an employer to secure the due performance of a contract with that Government and any other amount due to such employer from that Government in respect of such contract shall not be liable to attachment under any decree or order of any court in respect of any debt or liability incurred by the employer other than any debt or liability incurred by the employer towards any employee employed in connection with the contract aforesaid.
The Central Government may, for carrying into execution of the provisions of this Code in the State give directions to the State Government, and the State Government shall abide by such directions.
Nothing contained in this Code shall be deemed to affect the provisions of the Mahatma Gandhi National Rural Employment Guarantee Act, 2005(42 of 2005) and the Coal Mines Provident Fund and Miscellaneous Provisions Act, 1948(46 of 1948), or of any scheme made thereunder.
(1) The appropriate Government may, subject to the condition of previous publication, make rules for carrying out the provisions of this Code.
(2) In particular and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely:––
(a) the manner of calculating the wages under sub-section
(1) If any difficulty arises in giving effect to the provisions of this Code, the Central Government may, by order published in the Official Gazette, make such provisions not inconsistent with the provisions of this Code, as may appear to be necessary for removing the difficulty:
Provided that no such order shall be made under this section after the expiry of a period of three years from the commencement of this Code.
(2) Every order made under
(1) The Payment of Wages Act, 1936(4 of 1936), the Minimum Wages Act, 1948(11 of 1948), the Payment of Bonus Act, 1965(21 of 1965) and the Equal Remuneration Act, 1976(25 of 1976) are hereby repealed.
(2) Notwithstanding such repeal, anything done or any action taken under the enactments so repealed including any notification, nomination, appointment, order or direction made thereunder or any amount of wages provided in any provision of
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