Wage Code Bill

The Lok Sabha has approved the revised version of Code on Wages Bill which seeks to merge four labour laws related to wages, two of them dating back to 1936 and 1948.

Features of the Bill

• The bill seeks to define the norms for fixing minimum wages which will be applicable to workers of organised and unorganised sectors, except government employees and MNREGA workers.
• The bill seeks to do away with current provisions under which minimum wages are fixed based on skilled, unskilled, semi-skilled, high skilled, geographical regions, and nature of work such as mining and are applicable for 45 scheduled employments in the central sphere and 1709 scheduled employments in states.
• The bill proposes to link the minimum wages across the country only to factors of skills and geographical regions, while the rest of the factors have been removed.
• The amendments proposed by the bill are expected to reduce the number of minimum wages across the country to 300 from about 2,500 minimum wage rates at present.
• A National Floor Level Minimum Wage will be set by the Centre and would be revised every five years. State governments will be free to fix minimum wages for their regions, which cannot be lower than the floor wage.
• The bill proposes penalty ranging from Rs 10,000 to Rs 1 lakh and repeat offences would invite imprisonment along with providing for compounding of those offences which are not punishable with imprisonment.

The bill pursues the observation made in the Economic Survey which has said that a well-designed minimum wage system “can be a potent tool for protecting workers and alleviating poverty if set at an appropriate level that ensures compliance. The Ministry of Labour and Employment will also be placing the Code on Occupational Safety, Health and Working Conditions for approval before the parliament shortly.