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Q.1. What is the Code on Wages, 2019?

Ans: The Code on Wages, 2019 is a code passed by the Parliament of India in July 23, 2019 which replaces the four existing labour laws. They are (i) the Payment of Wages Act, 1936, (ii) the Minimum Wages Act, 1948, (iii) the Payment of Bonus Act, 1965, (iv) the Equal Remuneration Act, 1976.

Q.2. What is the applicability of Code on Wages?

Ans: The Code on Wages is applicable to all employees in both the organised and unorganised sector. The provisions of the Code covers all the employers and employees of all sectors except the members of the Armed Forces of the Union and apprentices engaged under the Apprentices Act, 1961 are excluded from the Code.

Q.3. What is ‘wages’ under the Code?

Ans: The definition of ‘wages’ had become uniform by the implementation of this Code. According to Section 2 (y) of the Code wages means all the remuneration. That is salary, allowance or any other component expressed in monetary terms which is payable to a person employed or given in respect of his work done. The definition includes basic pay, dearness allowance and retaining allowance.

Q.4. What is not included in wages?

Ans: The definition of wages excludes bonus payable to employees, value of house accommodation and utilities, any travelling allowance, employer contribution to pension and provident fund, any special expenses, award or settlement, overtime allowance, commission payable to employee, and gratuity payable on termination of the employment. The specified exclusions however may not exceed 50 percent of all remuneration and if exceeding, that amount shall be deemed as remuneration and will be considered as wages.

Q.5. What are the conditions for fixing the minimum wages?

Ans: Under Section 6 of the code, the appropriate government (central or state) shall fix a minimum rate of wages based on time work or piece work. While fixing the minimum wages, the governments may take into account factors such as, skill of workers, and difficulty of work.

Also by Section 8 of the code, the minimum wages shall be revised and reviewed by the central or state governments at intervals of not more than five years.

Q.6. How is the wages fixed for an employee working overtime?

Ans: Under Section 10 of the code, if an employee works for overtime than the normal working time he will be entitled to get overtime wages which is twice the rate of normal wages unless, if any kind of failure occurs in work due to his unwillingness to work and not by the omission of the employer to provide him with work or any other such circumstances which may be prescribed. 

Q.7. What are the modes of payment of wages?

Ans: According to Section 15 of the Code, all the wages shall be paid in the following mode:

  1. coin; or
  2. currency notes; or
  3. by cheque; or
  4. by crediting wages in the bank accounts of employee; or
  5. by electronic mode

Q.8. How is the wage period fixed?

Ans: The wage periods shall be fixed by the employer for the employees by Section 16 of the code, either as daily or weekly or fortnightly or monthly subject to conditions and the wage period must not exceed more one month. Different wage periods must be fixed for different establishments.

Q.9. When deduction can be made from wages?

Ans: According to Section 18 of the code, there shall be no deductions from the wages of the employee’s. But on the following cases deduction can be made, which is explained in Section 18(2) of the code they are:

  1. fines imposed on him; or
  2. absence from duty; or
  3. damage to or loss of goods which was entrusted to him for custody: or
  4. house accommodation provided by the employer; or
  5. for amenities and services provided for the employee.

These deductions should not exceed 50 percent of the employee’s total wage.

Q.10. How the payment of bonus is determined under the Code?

Ans: Section 26 of the Code deals with payment of bonus. All employees whose wages do not exceed a specific monthly amount (to be notified by the central or state government) will be entitled to an annual bonus. The minimum bonus prescribed under the Code is 8.33 percent and the maximum bonus payable is 20 percent.

 Q.11. Whether equal remuneration is provided for both men and women?

Ans: Section 3 of the code prohibits discrimination based on gender. As per this section the employer shall not reduce the rate of wages of any employee and make any discrimination based on the ground of sex while recruiting employees.

 Q.12. What are Advisory Boards?

Ans: Section 42 of the Code deals with the advisory boards. The Central and State governments constitute advisory boards. The Central Advisory Board by the Central government consists of following persons:

  1. representing employers;
  2. representing employees, which shall be in equal numbers as that of the employers;
  3. independent persons not exceeding one third of the total members of the board;
  4. five representatives of the state governments as nominated by the Central government.

The State Advisory Board by the State government consists of following persons:

  1. representing employers;
  2. representing employees which shall be equal in numbers as that of the employers;
  3. independent persons, not exceeding one-third of the total members of the board or committee or sub-committee.

Also one-third of the total members on both the Central and State Advisory Boards will be women.

Q.13. What are the duties of Central and State Advisory Boards?

Ans: The duties of Central and State Advisory board is to advice the respective governments on issues relating to:

  1. fixation or revision of minimum wages and other connected matters;
  2. providing and increasing employment opportunities for women;
  3. the extent to which women may be employed in such establishments or employments as the Central and the State Government may specify it by notification and
  4. any other matter relating to this Code.

Q.14. Who is an Inspector-cum-Facilitator?

Ans: Section 51 of the code specifies that there an Inspector-cum-Facilitator may be appointed. The Inspector-cum-Facilitator are public servants appointed by the government. He has the power to inspect any establishment also he can make search, seizure or can take copies of register, record of wages or notices. He can notify the appropriate government about defects or abuses in an establishment.