Code on Wages, 2019 (One of Four Labour Codes): Ensures Universal Minimum Wages and Gender Equity
SDG 8: Decent Work and Economic Growth | SDG 5: Gender Equality
Institutions: Ministry of Labour & Employment
The Code on Wages, 2019, one of the four key Labour Codes, has been enacted as a decisive step toward promoting equity, labour welfare, and enterprise sustainability by consolidating four central wages and payment related labour laws, including The Minimum Wages Act, 1948, and The Equal Remuneration Act, 1976. The overarching objective of the reform is to drive economic growth through the generation of decent employment opportunities and strengthen economic justice for all workers.
Key Provisions for Workers and Women
Universalization of Minimum Wages: The Code establishes a statutory right to minimum wages for all employees across both the organized and unorganized sectors, extending coverage far beyond the 30% of the workforce previously covered only under “scheduled employments”. This promotes social justice, reduces poverty, and improves living standards.
Introduction of Floor Wage: A statutory floor wage will be fixed by the Central Government based on minimum living standards (covering food, clothing, etc.). State governments must ensure their minimum wages are not fixed below this national floor level, reducing regional wage disparities and preventing wage undercutting across states.
Gender Equality: The Code ensures equal pay for equal work for all genders, including women and transgender identity, thereby fostering inclusivity and removing wage disparities. Furthermore, to ensure women’s voices are included in policy-making, one-third of the members on the Central/State Advisory Boards for minimum wages must be women.
Wage Protection: Provisions ensuring timely payment of wages and protection against unauthorized deductions are now applicable to all employees irrespective of the wage ceiling, bringing both blue-collar and white-collar employees under a uniform protection framework. The period of limitation for filing claims has been enhanced from 6 months-2 years to 3 years, giving employees more time to pursue justice.
Bonus and Overtime: Annual bonus payment is guaranteed for employees working at least 30 days in a year, and overtime wages must be paid at a rate not less than twice the normal wages.
Ease of Compliance and Enforcement
The Code shifts the focus from punitive action to compliance by replacing the “Inspector Raj” system with Inspector-cum-Facilitators, who emphasize guidance, awareness, and advisory roles. The Code also simplifies procedures significantly, for instance, reducing the number of rules from 163 to 58, forms from 20 to 6, and registers from 24 to 2, and supports the overall goal of Single Registration, Single License, and Single Return across all labour codes.
Policy Relevance: The Code represents a major leap in social justice and governance, securing a statutory floor wage that safeguards vulnerable groups, including women and migrant labourers. By unifying definitions and streamlining compliance with mechanisms like the Inspector-cum-Facilitator, the Code removes regulatory ambiguities, boosts investor confidence, and is pivotal for accelerating formalization and economic growth in India’s labour market.
What is the Floor Wage under the Code on Wages, 2019?→ The Floor Wage is a statutory minimum wage set by the Central Government, serving as the baseline standard across the entire country. It is fixed based on the employee’s minimum living standards (including basic needs like food and shelter) and must be revised regularly. Crucially, no State Government can fix its minimum wage for any category of employment below this notified floor level, thereby providing a uniform legal safeguard nationwide and promoting equity.
Follow the full update here: Code on Wages, 2019