Key Provisions - Code on Wages
Prohibition of Discrimination
No employer shall discriminate between employees on grounds of gender in matters relating to wages.
- Equal remuneration for same work or work of similar nature
- Experience can be a ground for discrimination
- Applies to ALL genders (male, female, transgender)
- No discrimination in recruitment except where employment of women is prohibited
- Prohibition of discrimination in conditions of employment
- Certain wage components shall not form part of the wages, while computing equal wages
Minimum Wages
The appropriate Government shall fix minimum wages for different classes of employees.
- Minimum wages applicable to all employments (organized and unorganized sectors)
- Components include basic rate of wages and allowances
- Different minimum wages may be fixed for different classes of work, age groups, and regions
- Review of minimum wages at intervals not exceeding 5 years
Floor Wage
The Central Government shall fix the floor wage taking into account living standards of workers.
- No state government can fix minimum wage below the floor wage
- Floor wage may be different for different geographical areas
- Factors considered include minimum living standards of workers
- Binding on all states - creates national minimum benchmark
Definition of Wages - 50% Rule
If exclusions from wages exceed 50% of total remuneration, the excess is added back to wages.
- Critical for calculating PF, ESI, gratuity, and bonus
- Prevents manipulation of wage structures to minimize contributions
- Employers must track all allowances and exclusions
- May require restructuring of compensation packages
Deductions from Wages
Only specified deductions are permitted from wages, with a 50% cap.
- Maximum total deductions: 50% of wages
- Fines for acts or omissions specified by the employer
- Deductions for absence from duty
- Deductions for damage or loss caused by negligence
- Deductions for house accommodation and amenities
- Recovery of advances and loans
- Income tax and statutory deductions
Claims and Limitation
Claims for unpaid wages must be filed within specified period.
- Limitation period: 3 years from date wages become due
- Single application can cover multiple employees
- Inspector-cum-Facilitator receives complaints
- Simplified claim procedure introduced
Inspector-cum-Facilitators
Appointment of Inspector-cum-Facilitators to ensure compliance.
- Dual role: enforcement AND advisory
- Powers of inspection and examination
- Web-based inspection scheme
- Advisory role to help employers comply with provisions
- Power to institute prosecutions
- Philosophy: Compliance facilitation over penalization