Code of Wages Bill, 2019

Published: July 23, 2019

The Code of Wages Bill, 2019 was introduced in the Lok Sabha on July 23. The Ministry of Labour and Employment has put in more than 5 years to develop the bill. While the members of the opposition wanted the bill to be referred to a parliamentary standing committee, the bill was introduced in the house.

What does the bill do?

  • The Bill seeks to aggregate and assimilate the prevalent labor laws (over 13 in number) in the country which already pertain to workers’ remuneration.
  • The key proposal in the bill is authorizing the central government to fix a mandatory national wage (minimum wage). This will be binding on the state governments to implement.
  • The Union Cabinet had already approved the bill which seeks to increase the national minimum wage by Rs 2 to Rs 178 per day.
  • The labor ministry committee’s ad suggested a rate of Rs 375 and the Economic Survey 2019 had stated that a better national wage will reduce income disparity and poverty in India.

What did the labor unions want?

  • The various labor unions of India want the government to increase minimum wages to Rs 20,000 per month and also provide a universal pension of Rs 6,000 per month.
  • They had also asked the government to reduce fixed-term employment and increase emphasis on employment creation through labor-intensive sector. This will boost social sector spending and benefits over 500 million workers in India.

What did the industrial houses want?

The industry body has opined that the minimum wages that are fixed by states should be based on three criteria – geographic location of the project, skill of the worker and occupation (or job profile). Providing a uniform pay would be counter-intuitive.

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