Major Changes in the Code on Wages, 2019

Provision		Old laws		Code on Wages, 2019		Remarks
Coverage		Minimum Wages Act: Minimum wages are fixed for scheduled employments		Minimum wages will be applicable to all the establishments irrespective of scheduled establishments.		The Employer has to provide the minimum wages to all the employees.
		Payment of Wages Act: Applies to employees whose wages do not exceed Rs. 24,000/- per month.		Provisions regarding payment of wages will be applicable to all employees irrespective of salary limit.		Now, the wage ceiling of Rs.24,000/- has been removed for applicability.
		Payment of Bonus Act: Applies to establishments with 20 or more persons and for employees whose wages do not exceed Rs. 21,000/- per month.		Bonus will apply to employees whose wages do not exceed a monthly amount notified by central or state governments
Definition		Sec 2 (i) of MWA   “employee" means any person who is employed for hire or reward to do any work, skilled or unskilled, manual or clerical, in a scheduled employment in respect of which minimum rates of wages have been fixed…		Sec 2 (k) : An 'Employee' is any person (other than an apprentice engaged under the Apprentices Act, 1961), employed on wages by an establishment to do any skilled, semi- skilled or unskilled, manual, operational, supervisory, managerial, administrative, technical or clerical work for hire or reward, whether the terms of employment be express or implied…   Sec 2 (z): A 'Worker' refers to any person  (except an apprentice as defined under clause (aa ) of section 2 of the Apprentices Act, 1961) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied, and includes …. But does not include any such person  who is employed in a supervisory capacity drawing wages of exceeding INR 15,000/pm		All the employees are covered including supervisory and managerial categories.
Definition		Sec 2 (h) of MWA: “wages” means all remuneration, capable of being expressed in terms of money which would if the terms of the contract of employment express or implied, were fulfilled, be payable to a person employed in respect of his employment or of work done in such employment 2[ and includes house rent allowance] but does not include- (i) the value of – (a) any house-accommodation, supply of light, water, medical attendance; or (b) any other amenity or any service excluded by general or special order of the appropriate Government; (ii) any contribution paid by the employer to any Pension Fund or Provident Fund or under any scheme of social insurance; (III) any travelling allowance or the value of any travelling concession; (iv) any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment; or (v) any gratuity payable on discharge.		Sec 2(y): "wages" means all remuneration, whether by way of salaries, allowances or otherwise, expressed in terms of money or capable of being so expressed which would, if the terms of employment, express or implied, were fulfilled, be payable to a person employed in respect of his employment or of work done in such employment, and includes,—               (a) Basic pay;               (b) Dearness allowance; and               (c) Retaining allowance, if any,  but does not include— (a) any bonus payable under any law for the time being in force, which does not form part of the remuneration payable under the terms of employment; (b) the value of any house-accommodation, or of the supply of light, water, medical attendance or other amenity or of any service excluded from the computation of wages by a general or special order of the appropriate Government; (c) any contribution paid by the employer to any pension or provident fund, and the interest which may have accrued thereon; (d) any conveyance allowance or the value of any travelling concession; (e) any sum paid to the employed person to defray special expenses entailed on him by the nature of his employment; (f) house rent allowance; (g) remuneration payable under any award or settlement between the parties or order of a court or Tribunal; (h) any overtime allowance; (i) any commission payable to the employee;  (j) any gratuity payable on the termination of employment; (k) any retrenchment compensation or other retirement benefit payable to the employee or any ex gratia payment made to him on the termination of employment, under any law for the time being in force: Provided that for calculating the wages under this clause, if payments made by the employer to the employee under sub-clauses (a) to (i) exceeds one-half, or such other per cent. as may be notified by the Central Government, of the all remuneration calculated under this clause, the amount which exceeds such one-half, or the per cent. so notified, shall be deemed as remuneration and shall be accordingly added in wages under this clause: Provided further that for the purpose of equal wages to all genders and for the purpose of payment of wages, the emoluments specified in sub-clauses (d), (f), (g) and (h) shall be taken for computation of wage. Explanation.—Where an employee is given in lieu of the whole or part of the wages payable to him, any remuneration in kind by his employer, the value of such remuneration in kind which does not exceed fifteen percent of the total wages payable to him, shall be deemed to form part of the wages of such employee;		·     The Definition of Wages in all the 4 codes is the same.
	Floor Wages		There is no such provision		The Central Govt. shall fix floor wages 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.
	Claim for Wages – Time limit		Any claim for wages could be made within 6 months.		Claim can be made within 3 years.
Time limit for payment of wages		Before the expiry of the 7th day of the succeeding month for establishments less than 1000 employees and before 10th day for the establishments more than 1000 employees		Before the expiry of the 7th day of the succeeding month for all establishments
Payment to an employee on separation		Within 2 working days of his termination of employment or closure of establishment		While retaining earlier provisions of 2 working days added retrenchment of an employee and also an employee resigning from his service
Disqualification for Bonus		Disqualification for bonus as an employee for dismissal misconducts i.e. fraud, riotous & disorderly behaviour, theft and misappropriation.		By retaining earlier provisions, also included: conviction for sexual harassment.
Inspections		Labour Dept is authorized to carry out surprise checks etc.		Appointment of an Inspector-cum-Facilitator not only to carry out inspections and provide information to employer for compliance. Inspection will be done on the basis of an inspection scheme which will include a web based inspection schedule.		An initiative in line with ease of doing business.
Inspectors territorial jurisdiction		Restricted Jurisdiction		The jurisdiction of inspectors or facilitators is widened under the Wage Code on Wages Act and ensured that an employer has to deal with a single inspector for compliance instead of one under each labour law.		The Act empowers the govt. to notify randomized selection process.
Provision		Current laws		Code on Wages, 2019		Remarks
Penalties under Minimum Wages Act.		Minimum Wages Offences include (i)          paying employees less than minimum wages, and (ii)         not providing for a day of rest in the week. Penalties include fine upto Rs.500/- and imprisonment upto 6 months.		Employers who pay less than what is due under the Code will pay a fine of upto Rs.50,000/-. If an employer is guilty of repeated offence within five years, penalties include imprisonment up to three months or a fine of up to Rs.1 lakh or both		·       Penalty amount increased ·       Imprisonment tenure decreased.
Penalties under Payment of Wages Act		Offences include (i)          non-­payment of wages at specified time period, (ii)        unauthorized deductions from wages. Penalties include fine upto Rs.7500/-.
Penalties under Payment of Bonus Act, 1965		In case a person or company does not comply with the Act, could be punished with imprisonment up to six months or fine upto Rs. 1000/-		Employers who do not comply with any other provision of the Code will pay a fine of up to              Rs. 20,000/-. If an employer is guilty of the same offence again within five years, penalties incl. imprisonment up to one month or a fine of upto Rs.40,000/- or both.
Penalties under Equal Remuneration Act, 1976		Offences include: (i)               non-maintenance of documents in relation to employees, and (ii)             discrimination against women in recruitment. Penalties include fine up to Rs.20,000/ - or imprisonment upto 1 year.
Burden of proof  in case of litigations		Lies with employees to prove their case		Lies with employer to defend their case.
Composition of offences		Not there in present laws		Employer can apply to the inspector for compound of offences charged on him.