Elucidate the key features of The Code on Wages, 2017.

The code on wages is the consolidation of all the laws relating to wages by replacing Payment of wages act-1936; Minimum wages act-1949 and Payment of Bonus act-1965.
Some of the Key features of the “The code on wages”, 2017 are

  • It aims at reducing wage disparity across the states by fixing National Minimum wage. The minimum wages decided by the central or state governments will not be lower than the national minimum wage. Besides, the minimum wage would be applicable on all classes of workers. At present, it is applicable for scheduled industries or establishments in the law
  • The Union or state governments will fix the number of hours that will constitute a working day. An employee will receive overtime allowance which will be at least twice the normal wage of the employee for working beyond these working hours on any day. 
  • The employer will pay each employee an annual bonus of at least 8.33% of his wages, or Rs 100, whichever is higher.
  • Mode of payment of wages can be done through coins, currency notes, by cheque or through digital mode
  • Four types of wage periods like daily, weekly, fortnightly or monthly are mentioned in wage code. This wage periods are decided by employer
  • Employee’s wages may be deducted but these deductions should not exceed 50% of the employee’s total wage.
  • Total four grounds are mentioned for deduction including fines, absence from duty, accommodation given by the employer, or Recovery of advances given to the employee, among others
  • The central and state governments will constitute their respective advisory boards which will have representations from employees, employers and independent persons. One third of the total members of the board will be reserved for women
  • The advisory boards will advise the respective governments on various aspects like fixation of minimum wages, and increasing employment opportunities for women.
Question for UPSC Mains:
Elucidate the key features of The Code on Wages, 2017.

Published: September 24, 2017 | Modified:June 27, 2019

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