India's labor law framework, prior to 2019, was criticized for being complex, fragmented, and outdated. Spread across multiple statutes, the rules governing wages were not only difficult to navigate but also excluded a large section of the workforce from their purview. Recognizing the need for simplification and modernization, the Government of India introduced the Code on Wages, 2019.
This Code consolidates and rationalizes four important labor laws:

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

The Code on Wages, 2019 aims to ensure fair wages, timely payments, and workplace equality, thereby promoting a more equitable labor environment. This blog analyzes the key changes brought by the Code with a special focus on Minimum Wage, Timely Payment, and Equal Remuneration, comparing the new framework with the old laws.

Evolution of Wage Laws in India: A Background

Before diving into comparisons, it is important to understand the historical background. India's labor laws were initially designed in the early 20th century, primarily to protect vulnerable workers in industrial sectors. Over time, numerous laws were introduced, often overlapping and sometimes contradictory. This created confusion and compliance burdens both for employers and employees. The need for labor law codification was widely recognized. In response, the Government undertook a major initiative to consolidate 29 central labor laws into four Codes, of which the Code on Wages was the first to be passed in August 2019.
 

Comparative Analysis: Old Laws vs Code on Wages, 2019

Minimum Wage

Old Legal Framework:

The Minimum Wages Act, 1948 mandated the fixation of minimum wages but only for employment listed in the 'Scheduled Employments'. States had the discretion to add more employments to the schedule, but many informal sectors remained uncovered. Moreover, there was no uniformity between states, and workers doing similar jobs in different regions could earn significantly different minimum wages.
 

Limitations:

• Limited coverage (only scheduled employments),
• Variation across states without a guiding national standard,
• Enforcement gaps due to administrative inefficiencies.
   

New Provisions under the Code:

The Code on Wages, 2019 removes the concept of scheduled employment. Now, minimum wages apply universally to all types of employment, regardless of the industry or sector. Additionally, the Code introduces the concept of a National Floor Wage to be set by the Central Government, below which no state can fix minimum wages.
 

Key Highlights:

• Universal coverage of minimum wage.
• National floor wage ensures a basic standard across India.
• Factors such as the skill level of workers, geographical region, and nature of work are considered while setting wages.
• Increased enforcement mechanisms through online portals and inspections.

Impact: This change is monumental as it brings a large number of informal and unorganized sector workers under minimum wage protection, thus advancing India's commitment to decent work standards.
 

Timely Payment of Wages

Old Legal Framework:

• Under the Payment of Wages Act, 1936, time limits for wage payment applied only to employees earning below a wage ceiling (e.g., ₹24,000/month).
• Employees earning above this threshold had no legal recourse for delayed payment.

Limitations:

• Limited applicability based on wage ceiling.
• No comprehensive framework for timely payments across sectors and income groups.

New Provisions under the Code:

• The Code on Wages, 2019 abolishes the wage ceiling restriction.
• All employees, regardless of salary, are entitled to timely wage payments.

Timelines prescribed under the Code:

• Daily wagers: Paid at the end of the shift.
• Weekly wagers: Paid on the last working day of the week.
• Fortnightly employees: Paid before the end of the second day after the fortnight.
• Monthly employees: Paid before the seventh day of the succeeding month.

Additional Safeguards:

• Wages must be paid through electronic transfer or cheque, ensuring transparency.
• Penalties for delayed payments have been tightened.

Impact:

This ensures greater financial security for all employees, especially critical for daily-wage earners and those in precarious employment.
 

Equal Remuneration

Old Legal Framework:

• The Equal Remuneration Act, 1976 prohibited gender-based wage discrimination.
• However, enforcement was weak, and employers found loopholes.

Limitations:

• Narrow interpretation of "similar work" allowed discrimination.
• Weak compliance and lack of gender sensitivity in workplaces.

New Provisions under the Code:

• Incorporates equal remuneration into the broader wage regulation framework.
• No discrimination based on gender in wages or recruitment for same/similar work.
• Protection extended to all genders with gender-neutral drafting.
• Grievance redressal mechanisms strengthened.

Impact:

This aligns with Article 39(d) of the Constitution, promoting gender parity in workplaces and encouraging greater female workforce participation.
 

Practical Applications and Real-World Impact

• Start-ups and gig economy: Workers like food delivery agents and freelancers now enjoy wage protections.
• Manufacturing and construction: Unregulated jobs now benefit from wage security, reducing exploitation.
• Women workers: Equal pay rules support gender equality in IT, healthcare, and service sectors.

Example: A female and a male software engineer doing similar tasks must receive equal pay under the Code.
 

Benefits for Employers:

• Simplified compliance reduces administrative burden.
• National consistency improves ease of doing business.
• Helps build a motivated and productive workforce.
   

Challenges and Criticisms

• Implementation challenges: Uniform minimum wage across states with varying living standards may be difficult.
• Ambiguity: Terms like "similar nature of work" may still invite disputes.
• Compliance for small employers: Small businesses may struggle without HR infrastructure.

However, these challenges can be overcome with effective rule-making and administrative clarity
Conclusion
The Code on Wages, 2019 represents a progressive step towards ensuring workers' rights in a fast-evolving economic environment. By unifying four critical labor laws into one coherent framework, expanding the scope of minimum wages, removing discriminatory barriers, and mandating timely payments, the Code ensures dignity, fairness, and security for millions of Indian workers.

It also aligns Indian labor laws with international labor standards, enhances transparency, and supports India's ambition to become a global economic powerhouse.
While challenges remain in implementation, the spirit of the legislation is undoubtedly transformative. As India moves forward, the success of the Code will depend on robust enforcement, proactive employer participation, and awareness among workers about their rights.

The Code on Wages is not just a legal reform; it is a reaffirmation of India's commitment to "Fair Wages for Fair Work".

References:

• admin. (2025, February 10). Code on wages, 2019: Comparative table. Corridalegal. https://corridalegal.com/code-on-wages-2019-comparative-table/
• Kumar, H. L. (n.d.). NEW CODES AND EARLIER LABOUR LAWS.
• taxguru_in, & Bhatia, A. (2025, April 23). Code on Wages 2019: A Comprehensive Comparison with Old Laws. TaxGuru. https://taxguru.in/corporate-law/code-wages-2019-comprehensive-comparison-laws.html
• The Code on Wages: Addressing the Key Changes and Their Impact – Legal Developments. (n.d.). Retrieved April 27, 2025, from https://www.legal500.com/developments/thought-leadership/the-code-on-wages-addressing-the-key-changes-and-their-impact/