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One of India's four Labour Codes, consolidating four wage laws into a uniform framework covering minimum wages, payment, bonus and equal remuneration.
The Code on Wages, 2019 is one of India's four Labour Codes, created to establish a uniform and transparent wage system. It consolidates four earlier laws — the Payment of Wages Act 1936, the Minimum Wages Act 1948, the Payment of Bonus Act 1965 and the Equal Remuneration Act 1976 — into a single framework. It was introduced on the recommendation of the Second National Commission on Labour, which proposed grouping India's many labour laws into a few broad Codes. Its objective is to promote fair wages, social justice and dignity of labour while simplifying compliance for employers.
Type: LawConsolidates four laws: Payment of Wages Act 1936, Minimum Wages Act 1948, Payment of Bonus Act 1965 and Equal Remuneration Act 1976
Introduces a FLOOR WAGE fixed by the Central Government — minimum wages fixed by any government cannot fall below it
Extends minimum wage protection to employees across all sectors, moving beyond the earlier limitation to scheduled employment
Provides a uniform definition of wages covering basic pay, dearness allowance and retaining allowance
Introduces the Inspector-cum-Facilitator system, combining enforcement with guidance and awareness
Extends the limitation period for filing wage claims to three years
The Code creates a two-tier structure. The Central Government sets a national floor wage, below which no minimum wage anywhere may fall. The appropriate government then fixes actual minimum wages at or above that floor, differentiated by circumstance.
Step 1: The Central Government fixes a floor wage, which may vary by geographical area
Step 2: The appropriate government fixes minimum wages that cannot be lower than the applicable floor wage
Step 3: Rates are set by skill level, geographical area and arduousness of work, on an hourly, daily or monthly basis
Step 4: Minimum wages must ordinarily be reviewed or revised at intervals not exceeding five years
4 — Payment of Wages 1936, Minimum Wages 1948, Payment of Bonus 1965, Equal Remuneration 1976
Ordinarily not exceeding five years
At least twice the normal wage rate
Generally 8⅓% to 20% of wages, for employees with at least 30 days' work in an accounting year
Three years
If excluded allowances exceed 50% of total remuneration, the excess is added back to wages
Two changes matter most. First, the floor wage creates a national baseline for the first time — previously minimum wages varied widely with no binding national minimum. Second, extending minimum wage protection beyond scheduled employment to all sectors substantially widens coverage, since large numbers of workers previously fell outside the listed employments. The uniform definition of wages, with its 50% rule on excluded allowances, also closes a long-standing avenue by which basic pay could be kept artificially low to reduce statutory obligations linked to wages.
Frequency: Frequently asked in UPSC Prelims economy sections and Banking general awareness since 2019.
Code on Wages, 2019 — one of India's four Labour Codes
Consolidates the Payment of Wages, Minimum Wages, Payment of Bonus and Equal Remuneration Acts
Floor wage set by the Central Government; minimum wages cannot be lower
Minimum wages extended to all sectors, not just scheduled employment
Overtime at least twice the normal rate; wage claims can be filed within three years
Introduced on the recommendation of the Second National Commission on Labour
It consolidates four 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 floor wage is a national baseline fixed by the Central Government. Minimum wages are fixed by the appropriate government and cannot be lower than the applicable floor wage.
Employees working beyond normal working hours are entitled to overtime wages of at least twice the normal wage rate.
Four. The Code on Wages, 2019 is one of them, introduced on the recommendation of the Second National Commission on Labour to group India's many labour laws into a few broad Codes.