Wages are the foundation of a worker’s livelihood. In India, the government has established robust wage laws to ensure that workers, particularly those in unorganised or low-paying jobs, receive fair and timely compensation. These laws protect workers from exploitation and promote social justice and economic equality.

In this blog, we’ll explore the key provisions of Wage law in India, focusing on the Code on Wages, 2019, and what every employer and employee should know.

What is Wage Law?

Wage law in India refers to the rules and regulations that govern:

  • Minimum wages
  • Payment of wages
  • Equal pay for equal work
  • Timely and full payment to workers

The aim is to ensure that every worker is paid fairly and on time, regardless of the nature of work or industry.

Introduction to the Code on Wages, 2019

The Code on Wages, 2019, is one of the four new labour codes introduced by the Indian government to simplify and unify complex labour laws. It consolidates four previous laws:

  1. The Payment of Wages Act, 1936
  2. The Minimum Wages Act, 1948
  3. The Payment of Bonus Act, 1965
  4. The Equal Remuneration Act, 1976

Key Provisions of the Code on Wages

1. Minimum Wages for All Workers

  • The law ensures a minimum wage for all employees, whether in the organised or unorganised sector.
  • Earlier, minimum wage laws applied only to scheduled employment. Now, it applies universally.

2. National Floor Wage

  • The central government will fix a national floor wage.
  • States cannot set minimum wages lower than this benchmark.

3. Equal Remuneration

  • The code ensures equal pay for equal work for men and women.
  • It prohibits gender-based wage discrimination.

4. Timely Payment of Wages

Employers must pay wages:

  • Before the 7th of the following month (for monthly wage earners)
  • Before the 10th day (for weekly wage earners)
  • On the last working day (for daily wage earners)

5. Mode of Payment

  • Wages must be paid in cash, currency notes, by bank transfer, or electronically.
  • Cash payments are allowed only in special cases.

6. Deductions

  • Only authorised deductions (like PF, taxes, fines, or loan repayments) are allowed.
  • Total deductions should not exceed 50% of total wages.

Who is Covered?

The Code on Wages applies to:

  • All employees in the public and private sectors
  • Gig workers, platform workers, and contractual labour
  • Workers across industries, from factories to shops and startups

Importance of Wage Law for Labourers

  • Protects from exploitation by ensuring fair pay
  • Reduces inequality between formal and informal sector workers
  • Improves the quality of life for low-income workers
  • Promotes industrial peace by resolving wage-related disputes

Penalties for Non-Compliance

Employers who fail to comply with wage law provisions can face:

  • Fines
  • Penalties
  • Imprisonment in cases of severe violations

Challenges in Implementation

  • Lack of awareness among workers about their wage rights
  • Informal sector employers often bypass wage laws
  • Inconsistent enforcement by local authorities
  • Delays in rolling out the new wage code across states

Conclusion

India’s wage laws are designed to protect the dignity and rights of every worker. With the Code on Wages, 2019, the government has taken a big step toward simplifying wage regulation and promoting fairness. However, effective implementation and awareness among workers are key to making these laws truly impactful.