Wage Code (Acts Related To Wage and Salary)

LABOUR LAW ACTS
RELATED TO WAGE
AND SALARY
Code on Wages, 2019
Code on Wages, 2019
◦ Consolidation of laws related to wages

◦ Payment of wages and timely disbursement
◦ Applicability and coverage of the code
◦ Ensures fair and equal remuneration for employees.
Acts & Provisions under this umbrella
◦ The Minimum Wages Act, 1948
◦ The Payment of Wages Act, 1936
◦ The Equal Remuneration Act, 1976
◦ The Payment of Bonus Act, 1965
Minimum Wages Act, 1948
◦ Fixation of Minimum Wages: The Act provides for the fixation and periodic revision of minimum wages by the appropriate
government, taking into account factors such as skill level, nature of work, and local conditions.
◦ Obligation for Timely Payment: It mandates that wages should be paid to employees before the expiry of the seventh day
after the last day of the wage period in respect of which the wages are payable.
◦ Components of Minimum Wages: The Act outlines the components that constitute minimum wages, including basic wages,
cost of living allowance, and other special allowances.
◦ Maintenance of Records: Employers are required to maintain and preserve records and registers containing particulars of
employees, the work performed, and wages paid.
◦ Inspectors and Enforcement: The Act empowers the government to appoint inspectors for the purpose of ensuring compliance
with the provisions of the Act and to take necessary actions in case of violations.
◦ The Minimum Wages Act, 1948 establishes the minimum rates of wages that must be paid to skilled and
unskilled laborers. It also outlines provisions for the fixation and revision of minimum wages, as well as
the obligation for timely payment.
◦ Violations of the Minimum Wages Act, 1948 may include paying wages below the prescribed minimum,
not maintaining required records, or failure to display notices specifying minimum rates of wages.
◦ Punishments for violations of the Minimum Wages Act, 1948 may include fines and/or imprisonment, as
specified by the competent authority under the act.
Payment of Wages Act, 1936:
◦ The Payment of Wages Act, 1936 is a legislation designed to regulate the timely payment of wages to
certain classes of employed persons. It ensures that wages are paid on time and in full, and it also covers
the permissible deductions that can be made from the wages of employees. The act also outlines the
maintenance of records and prescribes the mode of payment. Additionally, it provides for the
appointment of inspectors for enforcement and lays down penalties for contravention by employers.
◦ Violations of the Payment of Wages Act, 1936 may include non-payment of wages, unauthorized
deductions, or failure to maintain requisite records.
◦ Penalties for such violations may involve fines and/or imprisonment, as determined by the competent
authority under the act.
Payment of Wages Act, 1936:
◦ Timely Payment: The act ensures that wages are paid on time, and in case of termination, within two days.
◦ Authorized Deductions: It specifies the permissible deductions from wages, such as fines, deductions for absence from
duty, and damage or loss of goods expressly entrusted to the employee.
◦ Maintenance of Records: Employers are required to maintain records and registers showing the wage period, the work
performed by the employee, and other prescribed particulars.
◦ Mode of Payment: The act specifies the mode of payment of wages, ensuring that they are paid in current coin or
currency notes or by cheque or through electronic transfer, as may be prescribed.
◦ Inspectors and Penalties: It provides for the appointment of inspectors for the enforcement of the act and prescribes
penalties for contravention by employers.
Equal Remuneration Act, 1976
◦ The Equal Remuneration Act, 1976 aims to prevent discrimination in remuneration based on gender. It
mandates equal pay for equal work, irrespective of gender, and prohibits employers from paying different
wages to employees for the same work or work of a similar nature. The act also provides for the
constitution of advisory committees to promote the principle of equal remuneration for men and women
workers.
◦ Violations of the Equal Remuneration Act, 1976 may include instances where employers pay different
remuneration based on gender or fail to comply with reporting requirements. Penalties for such violations
may involve fines and/or imprisonment, as determined by the competent authority under the act.
Equal Remuneration Act, 1976:
◦ Equal Pay for Equal Work: The Act ensures that men and women are paid equally for work of the same or similar nature.
◦ Prohibition of Discrimination: It prohibits discrimination in remuneration on the basis of gender.
◦ Advisory Committees: The Act provides for the establishment of advisory committees to promote equal remuneration
and to advise the government on related matters.
◦ Employer Obligations: Employers are mandated to maintain records and make reports to the appropriate authorities
regarding the implementation of the Act.
◦ Remedies: The Act provides for appropriate remedies in case of violations, including the right to seek redressal through
the concerned authorities.
The Payment of Bonus Act, 1965
◦ Eligibility Criteria for Bonus: The Act outlines the eligibility criteria for employees to receive a bonus, based on the salary
or wages earned, the length of service, and other specified factors.
◦ Calculation of Bonus: It provides guidelines for the calculation of bonus, specifying the method for determining allocable
surplus and the proportions in which the bonus is to be distributed among employees.
◦ Time Limits for Payment of Bonus: The Act prescribes the time limits within which the bonus is to be paid to employees,
ensuring that it is disbursed within a specified period after the finalization of the bonus calculation.
◦ These provisions are aimed at ensuring fair and timely distribution of bonus to eligible employees in accordance with the
Act.
◦ For non-compliance, including fines and potential imprisonment, as determined by the competent authority under the Act.
These penalties are imposed in the event of violations such as failure to pay the bonus within the prescribed time limits or
other non-compliance with the Act's provisions.
Bird eye view
Act Formula/Calculation
1. Fixation of Minimum Rates of Wages: Determined by appropriate government

based on factors like skill, nature of work, and location.
2. Components of Minimum Wages: Basic Rate of Wages + Special Allowance
(adjusted at prescribed intervals).
Permissible Deductions from Wages: Deductions for fines, absence from duty, or
Payment of Wages Act, 1936
damage/loss caused by the negligence of the employee.
Calculation of Equal Wages for Equal Work: Men and women receive equal pay for
Equal Remuneration Act, 1976
similar work, considering skill, effort, and responsibility.
1. Calculation of Bonus: Bonus = (Salary or Wages Earned * Bonus Percentage)

Payment of Bonus Act, 1965 2. 2. Time Limits for Payment of Bonus: Bonus should be paid within eight months
from the close of the accounting year.
Payment of Wages and Timely Disbursement: Wages paid regularly, within prescribed
Code on Wages, 2019
time, with intervals not exceeding one month.
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LABOUR LAW ACTS

◦ Consolidation of laws related to wages

◦ Prohibition of Discrimination: It prohibits discrimination in remuneration on the basis of gender.

1. Fixation of Minimum Rates of Wages: Determined by appropriate government

1. Calculation of Bonus: Bonus = (Salary or Wages Earned * Bonus Percentage)

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