India's labour legislation witnessed a transformative change with the introduction of The Code on Wages, 2019, a significant stride in the government's initiative to consolidate and simplify India's complex and outdated labour laws.

This Code merges four major laws:

• The Payment of Wages Act, 1936
• The Minimum Wages Act, 1948
• The Payment of Bonus Act, 1965
• The Equal Remuneration Act, 1976

This consolidation is not just a legislative facelift but a proactive reform addressing the demands of a rapidly evolving workforce in both traditional and modern sectors.
 

Key Themes and Comparisons: Old vs. New Law

1. Universal Minimum Wage: Ensuring Inclusive Fair Compensation

   Old Law:
   • Minimum wages were notified only for scheduled employments under the Minimum Wages Act, 1948, leading to the exclusion of vast sectors like IT, gig economy, and unorganized labour.
   New Law:
   • The Code introduces a universal minimum wage applicable to all employees across all sectors and states, irrespective of industry type.
   • It mandates a floor wage by the central government, below which no state can fix its minimum wage.
   Example:
   • A delivery executive working for an online platform like Swiggy or Zomato, who was previously outside the scope of the Minimum Wages Act, is now assured of a basic wage standard.
      

2. Timely Payment of Wages: Closing the Wage Delay Loophole

   Old Law:
   • The Payment of Wages Act, 1936, applied only to workers drawing wages below a specific ceiling, and delays in wage payments were common in informal sectors.
   New Law:
   • The Code extends the timely payment provision to all employees, regardless of wage ceiling.
   • Mandates that wages must be paid by the 7th of the next month.
   • Encourages electronic payment modes to ensure transparency and traceability.
   Example:
   • Contract workers employed in sanitation projects in rural areas, previously exploited with delayed payments, can now demand timely disbursement through legal mechanisms.
      

3. Equal Remuneration: Promoting Gender Equity

   Old Law:
   • The Equal Remuneration Act, 1976, although progressive, lacked teeth and wasn't effectively implemented.
   • Employers often found loopholes to offer lower pay to women workers.
   New Law:
   • The Code prohibits gender discrimination in wage fixation and recruitment.
   • Strictly enforces equal pay for equal work for both men and women.
   Example:
   • A female factory worker performing the same manual job as her male counterpart in a textile unit must now be paid equally, with legal recourse available in case of disparity.
      

4. Simplified Bonus Norms and Wider Coverage

   Old Law:
   • The Payment of Bonus Act, 1965, applied only to employees earning up to a specified salary and was limited in scope.
   New Law:
   • Bonus payment rules are now uniform.
   • The eligibility threshold can be revised by the central government, allowing broader coverage of workers in emerging industries.
   Example:
   • Startups employing staff at moderate salaries must now factor in bonus obligations, ensuring better employee morale and retention.
    

Practical Impacts and Current Developments

• Gig Economy Inclusion: The Code indirectly benefits gig workers through universal wage standards and broad definitions of "employee".
• State-Level Updates: Many states like Haryana and Tamil Nadu have revised their minimum wages post-2019 to align with the central floor wage proposal, ensuring a national balance.
• Technology Integration: The push for e-payments and digitized wage records has improved compliance and reduced corruption in wage disbursements.
   

Challenges Ahead

While the Code is a major leap forward, challenges remain:

• Delay in full implementation across all states.
• Ambiguities in definitions such as "wages", which may lead to litigation.
• Enforcement hurdles in informal sectors where employer identity is unregistered or unclear.

Conclusion
The Code on Wages, 2019, represents a paradigm shift in India's labour law framework by establishing uniformity, accountability, and inclusivity in wage matters. It bridges the gap between formal and informal labour, recognizes modern employment models, and paves the way for a just and equitable wage system. However, consistent enforcement and worker awareness remain the key to realizing its full potential.

References:

• Ministry of Labour and Employment, Government of India – https://labour.gov.in
• The Code on Wages, 2019 – https://labour.gov.in/sites/default/files/CodeonWages.pdf
• Press Information Bureau, India – "One Nation, One Wage Code", August 2021
• PRS Legislative Research – https://prsindia.org/billtrack/the-code-on-wages-2019
• Economic Times, "New Wage Code to impact take-home salaries", January 2024
• Scroll.in, "What the wage code means for India's gig workers", July 2023