Introduction to the Code on Wages, 2019

The Code on Wages, 2019 was enacted as part of the broader labour reform initiative by the Ministry of Labour and Employment. It received presidential assent on August 8, 2019, and is the first of the four labour codes introduced by the Indian government under its labour law reform plan. The main objective of this Code is to bring transparency, accountability, and uniformity in the wage structure across various employment sectors, especially those involving informal and unorganised labour.

By replacing four different Acts with a single Code, the legislation simplifies compliance for businesses while enhancing wage security for workers. This shift reflects India's movement towards a more equitable and efficient labour market.

• Minimum Wage: From Sector-Specific to Universal Application
• Old Law: Under the Minimum Wages Act, 1948, the responsibility for fixing minimum wages lay primarily with the respective state governments. These wages varied by region, industry, skill level, and even within the same sector across different states. Moreover, the Act applied only to scheduled employments listed by the central or state governments, excluding many unorganised and informal sector workers. This limited the protection of minimum wage to a narrow segment of the workforce, leaving a significant portion-especially contract and gig workers-vulnerable to exploitation.
   
• New Law: The Code on Wages, 2019 broadens the scope by establishing a universal minimum wage. It empowers the central government to fix floor wages for different geographical regions, below which no state can set its minimum wages. This serves as a nationwide baseline, promoting wage parity and reducing regional discrepancies. Importantly, the Code extends minimum wage coverage to all employees, irrespective of sector or type of employment, thereby enhancing inclusivity. The central government must also revise the floor wage periodically, considering the cost of living, ensuring that wage standards adapt to economic changes. This transition is particularly beneficial for India's informal sector, which accounts for over 90% of the workforce.
   
• Impact: The practical implication is that workers previously excluded from the legal wage framework-like domestic help, gig workers, and contract labour-are now entitled to fair compensation. Simultaneously, employers benefit from a clearer and more uniform regulatory environment, encouraging better compliance.
   
• Timely Payment: Redefining Wage Disbursement Norms
• Old Law: The Payment of Wages Act, 1936 was primarily concerned with the timely disbursement of wages, but it only applied to employees drawing wages below a certain threshold (initially Rs. 1,600 per month, later revised). This limited applicability meant that many professionals and white-collar employees were not covered. Additionally, the law prescribed different timelines for different types of establishments, creating confusion and compliance difficulties for employers.
   
• New Law: Under the Code on Wages, 2019, timely payment of wages is made mandatory for all employees-regardless of the wage amount-thus removing the previous salary threshold. The Code mandates that wages must be paid:
  • Daily workers: at the end of the shift,
  • Weekly workers: on the last working day of the week,
  • Fortnightly workers: within two days of the fortnight ending,
  • Monthly workers: before the 7th day of the following month.
• Further, the Code allows wages to be paid in coin, currency notes, cheque, bank transfer, or through electronic means, promoting transparency and traceability.
• Impact: The shift from wage ceilings to universal applicability ensures that wage protection is no longer limited to low-income employees. It supports a consistent payment schedule across all sectors and employment types, reducing wage disputes and delays. The inclusion of digital payments aligns with India's push towards financial inclusion and a cashless economy.
   
• Equal Remuneration: Reinforcing Gender Neutrality
• Old Law: The Equal Remuneration Act, 1976 prohibited discrimination in wages based on gender and mandated equal pay for equal work for both men and women. However, its scope was narrowly interpreted, with loopholes and weak enforcement mechanisms. The Act failed to define "same work" or "work of a similar nature" clearly, leaving space for subjective interpretation. Moreover, it was limited in terms of the sectors and types of employment it covered.
   
• New Law: The Code on Wages, 2019 integrates the principle of equal remuneration for all genders into a broader wage framework. The Code specifically prohibits discrimination on the grounds of gender in both recruitment and conditions of employment, including wage rates. Furthermore, it clarifies that there shall be no discrimination in wages for work of similar nature, regardless of gender identity. This aligns with constitutional guarantees under Article 14 (Equality before law) and Article 39(d) (Equal pay for equal work), reinforcing the fundamental rights of workers.
   
• Impact: By embedding equal pay provisions within a consolidated wage law, the Code enhances enforceability. It also sends a strong socio-political message about gender equality in the workforce. Women, transgender persons, and other marginalized groups now have stronger legal backing to demand equal treatment in terms of pay and employment opportunities.
   
• Practical Application and Compliance Challenges
• Capacity Building: Both employers and employees need to be educated about the new legal framework. Training and awareness programs by labour departments and NGOs can bridge the information gap.
• Digital Recordkeeping: Encouraging the use of digital payment methods and recordkeeping can enhance compliance and ease labour inspections. Online platforms for wage dispute redressal should also be introduced.
   
• Uniform Inspection System: A centralized labour inspection mechanism should be introduced to avoid redundant checks and ensure consistency across states.
   
• State Rules & Implementation Lag: As labour is a concurrent subject, states must draft their own rules under the Code. As of now, some states are lagging in rule formulation, delaying the Code's implementation. Harmonization between central and state rules is essential.
   
• Publication and Relevance
• The Code on Wages, 2019 stands as a pivotal reform in the landscape of Indian labour law. Its publication reflects a deliberate shift towards employee-centric and simplified wage governance. In an economy where informal employment dominates, this Code ensures fair wages, timely payments, and gender neutrality, which are critical for both economic justice and productivity.

This Code is particularly relevant for law students, labour law practitioners, human resource managers, policy analysts, and workers' rights advocates. It represents a living example of how law can evolve to meet the socio-economic realities of a growing nation like India.

Conclusion
The Code on Wages, 2019 marks a significant departure from a fragmented and sector-specific wage regulation system. It consolidates, simplifies, and updates India's labour wage regime to reflect modern employment trends. The universal application of minimum wages, timely wage disbursement, and equal remuneration for equal work is not merely a legislative adjustment-it is a social justice imperative.

While challenges in implementation persist, the Code lays a solid foundation for a more equitable and inclusive workforce. With continued focus on awareness, digitalisation, and regulatory uniformity, the Code can drive India towards a future where every worker is respected, fairly compensated, and legally protected. As India aspires to become a $5 trillion economy, labour welfare cannot be sidelined. The Code on Wages, 2019 is a timely and necessary step in that direction-turning legal theory into practical empowerment.
Author : Joyleen Meki, 4th year student at Lovely professional university.


References:

• https://www.greythr.com/wiki/acts/code-on-wages-2019/
• https://labour.gov.in/sites/default/files/the_code_on_wages_as_introduced.Norm's
• https://www.foxmandal.in/a-new-era-of-labour-laws-beginning-with-the-code-of-wages-2019/
• https://byjus.com/free-ias-prep/code-on-wages-bill-2019/
• https://labour.gov.in/sites/default/files/the_code_on_wages_2019_no._29_of_2019.pdf