Cabinet approves new wage code bill to ensure minimum wage across all sectors

The Union Cabinet on 26 July 2017 approved the new wage code bill that will ensure a minimum wage across all sectors by integrating four labour related laws.

The new Labour Code on Wages Bill will be consolidating the Minimum Wages Act, 1948, the Payment of Wages Act, 1936, the Payment of Bonus Act, 1965 and the Equal Remuneration Act, 1976. The bill was approved by the Cabinet chaired by Prime Minister Narendra Modi.

The proposed legislation is expected to benefit over 4 Cr employees across the country.

Key Highlights

• The new bill seeks to empower the Centre to set a minimum wage across all sectors in the country, which would have to be maintained by the states as well.

• However, states will be able to provide for a higher minimum wage in their jurisdiction in place of the amount fixed by the central government.

• The bill is likely to be introduced in the Parliament during the ongoing monsoon session.

• The new minimum wage norms would be applicable for all workers irrespective of their pay.

• At present, the minimum wages fixed by the Centre and states are applicable to workers getting up to Rs 18000 per month.

• The move would ensure a universal minimum wage for all industries and workers including those getting paid higher than Rs 18,000 per month.

The same was announced previously by Union Labour Minister Bandaru Dattatreya in a written reply in the Rajya Sabha. He had informed the Upper House then that the Second National Commission on Labour has recommended that the existing labour laws should be broadly grouped into four or five labour codes on a functional basis.

Accordingly, Dattatreya said the ministry has taken steps for drafting four Labour Codes on — Wages; Industrial Relations; Social Security & Welfare and Safety and Working Conditions, respectively. It will be done by simplifying, amalgamating and rationalising the relevant provisions of the existing central labour laws.