The Code on Wages Act, 2019 is a comprehensive legislation that consolidates and replaces four existing laws related to wages in India: The Payment of Wages Act, 1936; the Minimum Wages Act, 1948; the Payment of Bonus Act, 1965; and the Equal Remuneration Act, 1976. The main objective of the Act is to simplify and rationalize the existing laws related to wages and to ensure that workers receive fair and just wages for their labour.

The Code on Wages Act, 2019 introduces several key reforms in the wage structure in India, including the introduction of a concept of the national floor wage, which provides a uniform wage floor across the country.[1] The Act also provides for the appointment of independent persons on committees for fixing and revising wages, thereby ensuring greater transparency and objectivity in the wage-setting process.

In addition, the Code on Wages Act, 2019 provides for the payment of equal remuneration to men and women workers for the same work or work of similar nature.[2] The Act also mandates the revision of minimum wages at least once every five years, thus ensuring that wages keep pace with inflation and other economic factors.

The Act also provides for better enforcement mechanisms and penalties for violations, thereby providing better protection to workers. The Act has introduced provisions for the payment of overtime wages, providing for a maximum of 8 hours of work per day and 48 hours per week, and the payment of wages through electronic modes.[3]

Overall, the Code on Wages Act, 2019 seeks to streamline the wage structure in India and ensure that workers receive fair and just wages for their labour, while also promoting gender equality in the workplace and providing for better enforcement mechanisms.[4]

Comparison Between The Code On Wage Act, 2019 And The Previous Laws On Wages In India

The Code on Wages Act, 2019 is a comprehensive legislation that replaces four existing laws related to wages in India[5]: the Payment of Wages Act, 1936; the Minimum Wages Act, 1948; the Payment of Bonus Act, 1965; and the Equal Remuneration Act, 1976. Here is a comparison between the Code on Wage Act, 2019 and the previous laws on wages in India:

• National Floor Wage: The Code on Wages Act, 2019 introduces the concept of a national floor wage, which provides a uniform wage floor across the country. This concept was not present in the previous laws on wages in India.
   
• Simplification of Laws: The Code on Wages Act, 2019 consolidates and simplifies the existing laws related to wages in India. This was not the case with the previous laws on wages, which were complex and difficult to understand.
   
• Appointment of Committees: The Code on Wages Act, 2019 provides for the appointment of independent persons on committees for fixing and revising wages, thereby ensuring greater transparency and objectivity in the wage-setting process. The previous laws did not have such provisions.
   
• Revision of Minimum Wages: The Code on Wages Act, 2019 mandates the revision of minimum wages at least once every five years, thus ensuring that wages keep pace with inflation and other economic factors. The previous laws did not have such a provision.
   
• Payment of Equal Remuneration: The Code on Wages Act, 2019 mandates the payment of equal remuneration to men and women workers for the same work or work of similar nature. The previous laws had a similar provision, but the Code on Wages Act, 2019 provides for better enforcement mechanisms and penalties for violations.
   
• Payment of Wages: The Code on Wages Act, 2019 provides for the payment of wages through electronic modes. The previous laws did not have such provisions.
   
• Enforcement Mechanisms: The Code on Wages Act, 2019 provides for better enforcement mechanisms and penalties for violations, thereby providing better protection to workers. The previous laws had similar provisions, but the Code on Wages Act, 2019 provides for stricter penalties and better enforcement mechanisms.

Furthermore, The Code on Wages Act, 2019 is a significant improvement over the previous laws on wages in India. The Act introduces several key reforms in the wage structure in India and provides better protection to workers.

Evolution Of The Principle Of Fixation And Revision Of Minimum Wages In India

The principle of fixation and revision of minimum wages in India has evolved over time. Here is a brief overview of its evolution:

• The Trade Boards Act, 1923: This was the first legislation in India that provided for the fixation of minimum wages. It established trade boards to fix minimum rates of wages for workers in certain trades and industries.
   
• The Payment of Wages Act, 1936: This Act regulated the payment of wages to certain classes of workers, and also provided for the fixation of minimum rates of wages for employees engaged in work for which no minimum rate had been fixed.
   
• The Minimum Wages Act, 1948: This was a comprehensive legislation that provided for the fixation and revision of minimum wages for workers in certain scheduled employments. The Act established minimum wages advisory boards, which were responsible for fixing and revising minimum wages.
   
• The Code on Wages Act, 2019: This Act is the latest legislation related to wages in India. It consolidates and simplifies the existing laws related to wages, and provides for the fixation and revision of minimum wages. The Act establishes a National Floor Wage, which provides a uniform wage floor across the country.

Over the years, there have been several amendments to these Acts, with the objective of improving the wage structure in India and providing better protection to workers. The fixation and revision of minimum wages has become an important tool for ensuring social justice and improving the standard of living of workers in India.

The Concept Of The National Floor Wage Under The Code On Wage Act, 2019

The concept of the National Floor Wage is an important aspect of the Code on Wages Act, 2019. Section 9 of the Act provides for the setting up of a National Minimum Wage by the Central Government[9], taking into account the factors mentioned in Section 6 of the Act.

Section 2(r) of the Act defines the term "National Floor Wage" as the minimum wage that is fixed by the Central Government for different geographical areas in the country. The National Floor Wage is a benchmark wage rate that must be followed by all States and Union Territories while fixing the minimum wages for workers in their respective jurisdictions.

The rationale behind having a 'floor wage' goes to the very core of having a minimum wage rate. As upheld in the case of Hydro (Engineers) P Ltd. v. Workmen[10]:

"Minimum wages rate must ensure not only the mere physical needs of the worker which would keep him just above starvation but must ensure for him not only his subsistence and that of his family but also preserve his efficiency as a workman. It should, therefore, provide for some measures of educational, medical requirements and amenities."

Section 13 of the Act provides that the Central Government may revise the National Floor Wage from time to time, taking into account the changes in the cost of living index, inflation, and other factors. The revised National Floor Wage must be notified in the Official Gazette, and the States and Union Territories must revise their minimum wages accordingly within three months from the date of notification.

The NFW is based[11] on the following factors:

• Basic needs: The NFW takes into consideration the basic needs of workers, such as food, shelter, clothing, healthcare, education, and other necessary expenses.
• Inflation: The NFW is adjusted for inflation to ensure that it keeps pace with the rising cost of living.
• Regional variations: The NFW takes into account regional variations in living standards and the cost of living.

The NFW is a significant step towards ensuring social justice and providing a decent standard of living to all workers in India. It serves as a wage floor below which no worker can be paid, and helps in reducing income inequality and poverty.

Factors To Be Considered While Fixing And Revising Minimum Wages Under The Act

The Code on Wages Act, 2019 lays down certain factors that must be taken into consideration while fixing and revising minimum wages[12]. These factors include:

• Skill level: The skill level of the worker is an important factor in determining minimum wages. Workers with higher skills and expertise are expected to be paid higher wages than those with lower skills.
   
• Nature of work: The nature of work being performed by the worker is another factor that must be considered while fixing minimum wages. Jobs that are more physically demanding or require more skill and expertise may require higher wages.
   
• Prevailing market rates: The minimum wages must be fixed taking into account the prevailing market rates in the particular industry or sector.
   
• Cost of living: The cost of living in the region where the worker is employed is an important factor that must be considered while fixing and revising minimum wages. The wages should be sufficient to provide the worker with a decent standard of living, including basic needs such as food, housing, healthcare, and education.
   
• Inflation: Inflation is an important factor that must be taken into account while revising minimum wages. The minimum wages must be revised periodically to ensure that they keep pace with the rising cost of living.
   
• Productivity: The productivity of the worker is another factor that may be considered while fixing minimum wages. Workers who are more productive may be paid higher wages than those who are less productive.
   
• Profitability of the industry: The profitability of the industry or sector in which the worker is employed may also be considered while fixing and revising minimum wages. The wages must be reasonable and affordable for the employers, while also ensuring a decent standard of living for the workers.

These factors must be balanced while fixing and revising minimum wages to ensure that they are fair and reasonable for both the workers and the employers.

Appointment Of Committees For Fixing And Revising Minimum Wages

Under the Code on Wages Act, 2019, committees can be appointed by the appropriate government for the purpose of fixing and revising minimum wages. The following are the sections relevant to the appointment of committees:

1. Section 6(1): This section provides for the appointment of a committee called the Central Advisory Board by the Central Government to advise the Central and State Governments on the matters related to the minimum wages^[13].
    
2. Section 8(1): This section provides for the appointment of committees called the Advisory Boards by the appropriate government for the purpose of advising the government in the matters related to the fixation and revision of minimum wages^[14].
    
3. Section 9(1): This section provides for the appointment of committees called the Committees for the Purpose of Fixation of Minimum Wages by the appropriate government for the purpose of fixing and revising minimum wages^[15].
    
4. Section 13(1): This section provides for the appointment of committees called the Committees for the Purpose of Recommending Rates of Wages by the appropriate government for the purpose of recommending rates of wages for different occupations and industries^[16].

These committees are appointed by the appropriate government after consulting with the Central Government and considering the representation of employers and employees in the relevant industries. The committees are required to conduct inquiries and take into account various factors such as the cost of living, the skill level required for the job, and the prevailing rates of wages in the industry, among others, while fixing and revising minimum wages.

The appointment of committees for fixing and revising minimum wages is an important aspect of the Code on Wages Act, 2019, as it ensures that the minimum wages are fixed based on scientific principles and taking into account the concerns of both employers and employees. This ensures a fair and equitable wage structure for workers across different industries and occupations.

Timeframe For Revision Of Minimum Wages Under The Act

Under the Code on Wages Act, 2019, there is a specific timeframe for the revision of minimum wages. The Act provides for periodic revisions of minimum wages to ensure that they keep up with inflation and changes in the cost of living.

• Section 9(3): This section provides that the appropriate government shall review and revise the minimum rates of wages at an interval not exceeding five years[17].
• Section 9(4): This section provides that the appropriate government may revise the minimum rates of wages in case of any change in the cost-of-living index, the increase in productivity, and other relevant factors[18].
   
• Section 9(5): This section provides that the appropriate government may, by notification in the Official Gazette, revise the minimum rates of wages for different classes of workers based on geographical areas, including the rural, semi-urban, and urban areas.[19]
   
• Section 9(6): This section provides that the appropriate government may, by notification in the Official Gazette, revise the minimum rates of wages for different categories of workers, including unskilled, semi-skilled, skilled, and highly skilled workers[20].

The Code on Wages Act, 2019 provides for the timely revision of minimum wages to ensure that workers receive fair remuneration for their work. The appropriate government is required to periodically review and revise the minimum rates of wages, and may also revise the rates based on changes in the cost-of-living index, productivity, and other relevant factors.

Analysis Of The Impact Of The Code On Wage Act, 2019 On Workers And Employers In India

The Code on Wages Act, 2019, introduced significant changes to the regulation of wages in India, with the aim of improving the working conditions and welfare of workers while also promoting ease of doing business for employers. This section will analyze the impact of the Code on Wages Act, 2019, on workers and employers in India.

One of the significant impacts of the Code on Wages Act, 2019, on workers is the introduction of the concept of a statutory floor wage[21]. The Act mandates that all workers in India will receive a minimum wage that is fixed by the central government, which will take into account factors such as the skill level of workers, inflation rates, and the cost of living in different regions of the country[22]. This provision is expected to benefit millions of workers who were previously paid below the minimum wage, as well as provide them with some financial stability and security.

The Code on Wages Act, 2019, also makes it mandatory for employers to pay wages on time and ensures that workers receive equal pay for equal work, regardless of their gender[23]. This provision is expected to benefit women workers, who are often paid lower wages than their male counterparts for doing the same work.

However, some experts have expressed concerns that the Code on Wages Act, 2019, may also have some negative impacts on workers. For example, the Act has reduced the number of minimum wage categories, which may result in some workers receiving lower wages than before. Additionally, the Act allows employers to hire workers on a fixed-term contract, which may result in job insecurity for workers.

In terms of the impact of the Code on Wages Act, 2019, on employers, the Act has simplified the process of fixing and revising minimum wages and reduced the compliance burden on employers. The Act has also made it easier for employers to hire workers on a fixed-term contract, which may promote ease of doing business in India.

However, some experts have argued that the Code on Wages Act, 2019, may increase the cost of labor for employers[24], particularly in sectors that rely heavily on unskilled labor. This may result in job losses or a shift towards automation, which may have negative impacts on workers.

In conclusion, the Code on Wages Act, 2019, has both positive and negative impacts on workers and employers in India. While the Act aims to improve the working conditions and welfare of workers, it may also result in some workers receiving lower wages and job insecurity. Additionally, while the Act may promote ease of doing business for employers, it may also increase the cost of labor and result in job losses. Therefore, it is important to monitor the implementation of the Act and take necessary measures to mitigate any negative impacts.

Challenges In The Implementation Of The Act And Suggestions For Improvement

The implementation of the Code on Wage Act, 2019 has faced several challenges since its introduction. Some of the challenges in the eyes of the author include:

• Lack of awareness: Many workers and employers in India are not aware of the provisions of the new law, which has resulted in non-compliance.
• Enforcement issues: The implementation of the law has been hindered by a lack of enforcement mechanisms and capacity of the authorities responsible for enforcing the law.
• Complexity of the law: The Code on Wage Act, 2019 is a complex law that covers several aspects of wages and employment. This complexity has made it difficult for workers and employers to understand the law and comply with its provisions.
• Resistance from employers: Some employers have resisted the implementation of the new law, as it increases their wage bill and compliance costs.

Suggestions for Improvement:

• Awareness campaigns: The government should undertake awareness campaigns to educate workers and employers about the provisions of the new law and its benefits.
• Strengthen enforcement mechanisms: The authorities responsible for enforcing the law should be provided with adequate resources and capacity to effectively enforce the law.
• Simplify the law: The government should simplify the provisions of the law to make it easier for workers and employers to understand and comply with its provisions.
• Provide support to employers: The government can provide financial and technical support to employers to help them comply with the law.
• Address concerns of employers: The government can engage with employers to address their concerns about the implementation of the law and find solutions to help them comply with the law without causing undue burden on their businesses.

By addressing these challenges and implementing these suggestions, the implementation of the Code on Wage Act, 2019 can be improved, which will lead to better wages and working conditions for workers in India, and greater compliance by employers.

Conclusion
In conclusion, the Code on Wage Act, 2019 marks a significant shift in the regulation of wages in India. The Act introduces several new provisions, including the concept of a national floor wage, and lays down a comprehensive framework for fixing and revising minimum wages. The Act also provides for stronger enforcement mechanisms and penalties for violations, which is a positive step towards ensuring compliance with wage laws.

However, the implementation of the Act poses several challenges, such as the lack of awareness and capacity among employers and workers, the need for better monitoring mechanisms, and the potential for bureaucratic delays. To address these challenges, there is a need for greater awareness-raising, capacity-building, and collaboration between the government, employers, and workers. Overall, the Code on Wage Act, 2019 has the potential to significantly improve the wages and working conditions of workers in India, but its success will depend on effective implementation and enforcement.

End-Notes:

1. The Code on Wages Act, 2019
2. IBID
3. IBID
4. Code on Wages Act, 2019, Preamble
5. New Wage Code, Ministry of Labour and Employment,
6. The Payment of Wages Act, 1936
7. The Minimum Wages act, 1948
8. Section 9, The Code on Wages Act, 2019
9. The Code on Wages Act, 2019
10. 1969 SCR (1) 156
11. National Floor Level Minimum Wage in India, https://payrollpedia.org/national-floor-level-minimum-wage-in-india-the-latest-development/
12. Top 8 Factors Influencing the Determination of Wage Rates, https://www.yourarticlelibrary.com/employee-management/wages/top-8-factors-influencing-the-determination-of-wage-rates/34666
13. Section 6(1), The Code on Wages Act, 2019
14. Section 8(1), The Code on Wages Act, 2019
15. Section 9(1), The Code on Wages Act, 2019
16. Section 13(1), The Code on Wages Act, 2019
17. Section 9(3), The Code on Wages Act, 2019
18. Section 9(4), The Code on Wages Act, 2019
19. Section 9(5), The Code on Wages Act, 2019
20. Section 9(6), The Code on Wages Act, 2019
21. Section 9, The Code on Wages Act, 2019
22. Section 4, The Code on Wages Act, 2019
23. Section 3, The Code on Wages Act, 2019
24. Review of Wage Code Bill, 2019 and its Implications, https://www.legalserviceindia.com/legal/article-5152-review-of-wage-code-bill-2019-and-its-implications.html