The Code on Wages, 2019, is an Act of the Parliament of India that consolidates and amends laws relating to wages and bonus payments. Its origin lies in the government's 2015 plan to rationalize India's complex labour laws and improve the ease of doing business by consolidating 44 central laws into four codes. The Code on Wages Bill, 2019, was passed in August 2019 and received Presidential assent on August 8, 2019. The Code solved the problem of differing definitions and applicability across multiple statutes by creating a single, unified framework.
The Code works by extending the provisions for minimum wages and timely payment to all employees in both the organized and unorganized sectors, removing previous wage ceilings. A key provision is the Central Government's power to fix a floor wage, which the minimum wages set by state governments cannot be lower than. The Code provides a uniform definition of "wages" (Section 2(y)), mandating that the sum of basic pay, dearness allowance, and retaining allowance must constitute at least 50% of an employee's total remuneration. Furthermore, it prohibits gender discrimination in matters of wages and recruitment for the same or similar work (Section 3). For timely payment, it requires full and final settlement of wages within two days of an employee's termination or resignation.
The Code on Wages is the first of four major labour codes, connecting it to the Code on Social Security, 2020, the Industrial Relations Code, 2020, and the Occupational Safety, Health and Working Conditions Code, 2020. It fundamentally changed the legal landscape by repealing and replacing four older acts: the Payment of Wages Act, 1936, the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965, and the Equal Remuneration Act, 1976. While the core concepts of minimum wages and equal pay remained, the Code made their application universal and standardized the definitions. Major provisions of the Code came into effect on November 21, 2025.