The Code on Wages, one of India’s four labour codes, lays down uniform timelines for salary payments and strengthens employee protections by extending provisions on timely wage payments to all employees, irrespective of their salary levels.
Under the Code, employers are required to pay monthly salaries before the seventh day of the following month. Employees paid on a weekly basis must receive their wages before the last working day of the week, while those paid fortnightly must be paid within two days after the end of the wage period. Daily-rated workers are entitled to receive their wages at the end of each workday.
The legislation also prescribes timelines for settling final dues. Employees who resign, are dismissed, removed or retrenched must receive all outstanding wages within two working days of their separation from the organisation.
To ensure compliance, the Code provides for the appointment of inspector-cum-facilitators to oversee implementation. Employees can approach the designated authority if salaries are delayed or if unauthorised deductions are made from their wages. The law allows employees up to three years to file such claims.
If an employer fails to comply with an order directing payment of wages or compensation, the amount can be recovered as arrears of land revenue under the provisions of the Code.
The Code on Wages replaces several earlier wage-related laws, including the Payment of Wages Act, 1936, with a single framework governing wage payments. One of the key changes is that the protections relating to timely salary payments and unauthorised deductions now apply to all employees, removing the wage ceiling that existed under the previous legislation.
The Code on Wages (Central) Rules also require employers to issue wage slips in either physical or electronic format on or before salary payment. In addition, the legislation regulates permissible salary deductions and prescribes limits on the total amount that can be deducted from an employee’s wages.
