Labour Rights Codes on wages Bill

Introduced: Lok Sabha (23rd July 2019)

Passed: Lok Sabha (30th July 2019)

Passed: Rajya Sabha (2nd Aug 2019)

Present status: Received assent on 8th August, 2019.

Ministry: Labour and Employment

Objectives of the Labour Rights Codes on wages Bill, 2019

  • The bill seeks to consolidate laws relating to wages by replacing- Payment of Wages Act, 1936; Minimum Wages Act, 1948; Payment of Bonus Act, 1965 and Equal Remuneration Act, 1976.
  • To formulate a statutory National Minimum Wage for different regions. The economic survey 2018-19 had also mentioned that a national mandatory minimum wage is a requirement.

Key provisions of Labour Rights Codes on wages Bill, 2019

  1. Defined Wages appropriately: it removes the multiplicity of wage definitions leading to significantly reduce in litigation as well as compliance cost for employers.
  2. Uniform wages: The Bill stipulates to link minimum wages only to factors such as skillset and geographical location. This would bring down the number of minimum wage rates across the country to 300. These labour Codes seek to universalise the right to minimum wage of workers, presently available to only about 30% of the workforce engaged in the scheduled employments.
  3. Extends to all sectors: It seeks to universalizes the provisions of minimum wages and timely payment of wages to all employees irrespective of the sector and wage ceiling.
  4. National Floor Level Minimum Wage: To be set by the Centre and will be revised every five years, while states will fix minimum wages for their regions, which cannot be lower than the floor wage.

Concerns associated with Labour  Rights Codes on wages Bill, 2019

  • The bill does not define “who is a worker” clearly.
  • The calculation of the level of minimum wage by an expert committee is at variance with ILO parameters.
  • A ‘national minimum wage’ is a good idea, but its computation is cause for concern. Instead of a single national minimum wage, the bill proposes multiple minimum wage structure at different geographical zones.
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