Draft Rules For Code On Wages

• 13 Jul 2020

• The Union Labour and Employment Ministry has published the draft rules framed for the implementation of the Code on Wages Act, 2019, that guarantees minimum wages to all, defines how the wages will be calculated and prescribes a national floor-wage for all States.
• It subsumes the Payment of Wages Act, 1936, the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965 and the Equal Remuneration Act, 1976.

Major Provisions in the Draft

Working Hours: The normal working day shall comprise eight hours of work and one or more intervals of rest which in total shall not exceed one hour. 

Calculation of Minimum Wage: The criteria for fixing the minimum rate of wages per day for employees include:

• standard family of four (self, spouse and two children)
• daily intake of 2700 calories per consumption unit,
• 10% expenditure on rent,
• 20% expenditure of fuel, electricity, and miscellaneous items, and
• 25% expenditure on education, medical requirements and contingencies.

Norms for Fixing Minimum Wage: Minimum wages will be calculated on the basis of the geographical area of employment and the skill category of an employee.  For this purpose, the central government will divide the geographical area into three categories: metropolitan, non-metropolitan and rural areas.The occupations are also divided into four skill categories: unskilled, semi-skilled, skilled and highly skilled.