Lok Sabha passes Wage Code Bill, brings in more transparency and accountability

The historic Bill provides for application of minimum wages to the workers in the informal as well as formal sectors.


The Wage Code Bill seeking to merge four labour laws pertaining to wages, has been passed by the Lok Sabha. While it aims to provide for a national mandatory minimum wage, it has yet to announce the same. It provides for application of minimum wages to workers in the informal and formal sectors. It will also rationalise the number of wage types, from approx. 2,000 categories to about 200, and decrease the influence of inspectors on organisations, something that employers have been demanding for a long time now.

The Bill will transform old and outdated labour laws, bringing in more accountability and transparency.

It will not only universalise the payment of minimum wages but will also ensure timely payment of wages. Once the Bill becomes an Act, those who were not covered under the minimum wages will also be protected.

The Bill removes the Rs 24,000 threshold under the Payment of Wages Act , bringing all employees under the code. It has increased the time period for settling wage disputes to three years. Earlier, it was six months to two years.

While the Bill will play a significant role in protecting workers and getting rid of poverty in the long run, it does not really explain how it will reduce gender discrimination when it comes to payment of salary and how it will monitor compliance.

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