The Code on Wages, 2019 is an Act of the Parliament of India, which consolidates and amends the laws relating to wages and bonus payments to all employees. It was enacted to rationalize India's complex labour laws and improve the ease of doing business, following a recommendation by the Second National Commission on Labour. The Code received the President's assent on August 8, 2019, and is the first of four comprehensive labour codes.
The Code replaced and subsumed four central laws: the Payment of Wages Act, 1936, the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965, and the Equal Remuneration Act, 1976. The primary problem it solved was the limited coverage of the old laws, which only applied minimum wages to "scheduled employments," covering approximately 30% of the workforce.
The key mechanism is the universalisation of minimum wages to all employees, irrespective of sector or wage ceiling, including those in the unorganised sector. It introduces the concept of a national floor wage, which the Central Government fixes based on workers' living standards, and state governments cannot set their minimum wages below this floor. The Code also mandates equal remuneration for men and women for the same work or work of a similar nature, prohibiting gender discrimination in wages and recruitment. A significant change is the uniform definition of "wages," which includes basic pay, dearness allowance, and retaining allowance, and stipulates that these components must constitute at least 50% of the employee's total remuneration. This Code connects to the other three labour codes: the Industrial Relations Code, 2020, the Code on Social Security, 2020, and the Occupational Safety, Health and Working Conditions Code, 2020.