Presentaion_on_The_Code_on_Wages,2019_3061.pdf

Labour law

1. CONSULTECH
Presentation on
The Code on Wages, 2019

2. SUBTITLE HERE
BACKGROUND
SALIENT FEATURES
DEFINITIONS
IMPORTANT KEY POINTS
PAYMENT OF MINIMUM WAGES
PAYMENT OF WAGES
PAYMENT OF BONUS
GENDER DISCRIMINATION
OFFENCES AND PENALTIES
FAQ
CONTENTS

3. 1 2
34
The Equal Remuneration Act, 1976
The Payment of Bonus Act,1965
The Payment of Wages Act,1936
The Minimum Wages Act,1948
TheCodeonWages,2019wasintroducedinLokSabhabytheMinisterofLabour,Mr.SantoshGangwaronJuly23,
2019andisenactedbythepresidentofIndiaon8thAugust2019.TheCodedevoursthefollowingfourlaws:
3
BACKGROUND

4. Central/StateGovernmenttodeterminethefactorsbywhichthe
minimumwagesshallbefixedfordifferentcategoryofemployees.The
stategovernmentsareempoweredtonotifyminimumwagebutnot
belowfloorwagedecidedbythecentralgovernment.
TheCodeonWage2019hasdefineddefinitionofwageand
empoweredrelevantstategovernmenttodecidecomponentof
minimumwagethroughsection7sub-section(1).InMostofthecases
HRAwaspartoftheminimumwagehowever;itwillnotbepartof
Minimumwagesubjecttospecificnotificationissuedbythe
State/CentralGovernment.ThereforliabilityofProvidentFundmay
increaseincaseoflowersalary.+
TheCodeonWage2019shallbeapplicableforallemployeesand
workmanirrespectiveofsalaryanddesignation.
W R I T E Y O U R S U B T I T L E H E R E
4
SALIENT FETURES

5. Limitation for
Filing claims
Penalty
Theperiodoflimitationforfilingofclaimsbyaworkerhasbeen
enhancedtothreeyears,asagainsttheexistingtimeperiodvarying
fromsixmonthstotwoyears,toprovideaworkermoretimetosettle
hisclaims.
Penaltyprovisionsaremademorestringent
underthecodeonwagebill2019.
5
SALIENT FETURES

6. Definitions
Employer-Sec.2(i)
Meansapersonwhoemploys,whetherdirectlyorthroughanyperson,oronhis
behalforonbehalfofanyperson,oneormoreemployeesinhisestablishment.
•Factory:OccupierordefinedfactorymanagerisEmployer.
•OtherEstablishment:AppointedManagerorManagingDirector.
•ContractorandAppointedlegalrepresentative
Establishment-Sec.2(m)
Itincludesanyplacewhereanyindustry,trade,
business,manufactureoroccupationiscarried
onandincludesGovernmentestablishment.
Contractor-Sec. 2(f)
Itincludesjobwork–Materialsupplierand
Man-powersupplier.
6
DEFINITIONS

7. WRITE YOUR SUBTITLE HERE
Sec.2 (k) Sec.2 (g)
Employee ContractLabour
•Anyperson(otherthanan
apprenticeengagedunderthe
ApprenticesAct,1961),employed
onwagesbyanestablishmentwith
whateverrolesandresponsibility
anddesignation.
•Anypersonhiredforspecificworkbya
contractorwithorwithoutknowledgeof
principalemployerbutexcludedany
personasacontractLabourif;
•Anypersonisaregularemployeeofthe
establishmentforanyactivityof
contractorestablishmentandnotfor
establishmentofprincipalemployer.
•Getsperiodicalincrementinthepay,
socialsecuritycoverageandother
welfarebenefitsfromestablishmentof
contractor.
7
DEFINITIONS

8. Wages: Section :2 (y) Means all remuneration,
WRITE YOUR SUBTITLE HERE
Consider
as Wages
Not
Consider
as Wages
i. BasicWages
ii. DearnessAllowance
iii. RetainingAllowance
a. StatutoryBonus
b. Valueof Any House
Accommodations and other
amenity
c. Pension or Provident
fund
d. Conveyance/Travelling
Concession
k. AnyRetrenchmentandEx-
Gratia Payment
Remark:DuetoShort-fallofminimumwage;manycompanypayex-gratiapayment
tocompensateshortfallinminimumwage.Itmaynotconsideraswageaccordingto
CodeonWage2019
8
DEFINITIONS
e. Defray special Expenses
f. House Rent Allowances
h. Overtime
i. Commission
j. GratuityPayment

9. 9
IMPORTANTKEYPOINTS
9
Section Provisions Law andAnnotations
Section.2 (k)
Value of
Remuneration
·Anypaymentmadeinanyheads(a)to(i)exceed50%oftotalpayment,shallbedeemedas
wage/Remuneration.
·Forthepurposeofequalwagestoallgendersandforthepurposeofpaymentofwages,the
emolumentsspecifiedinclauses(d),(f),(g),(h)shallbetakenforcomputationofwages.
·Explanation-ThevalueofremunerationinKINDwhichdoesnotexceedfifteenpercentages
(15%)ofthetotalwagespayabletohimshallbedeemedtoformpartofthewagesofsuch
employee.
Section.2 (z)
Not Consider as
Workers
·Personrecruitedasmanagerial/SupervisoryorAdministrativecategoryandwageisabove15,000
orasnotifiedbycentralgovernmentshallnotbeconsideredas“worker”buthewillremain
underdefinitionof“employee”undercodeofwage2019.

10. EDUCATION INFOGRAPHIC
WRITE YOUR SUBTITLE HERE
Fixation of Minimum Wages-Section. 6 (1)
Appropriate Government (State Government)
empowered for fixing of minimum wage.
Time Bases & Piece Based Minimum Wages-Section. 6 (2)
•Minimum wage shall be classified in “Time based
minimum wage” and “Piece based Minimum
wage”
•The Minimum rate of wages on time work basis
may be fixed in accordance with any one or more
of the following wage Periods, namely:
1.DailyBasis
2.HourlyBasis
3.MonthlyBasis.
Procedure for Fixing Minimumwage-Section. 6 (6)
Considerfollowingfactorssuchas:
•Basedonskillofworkersgeographicalareaor
both,anddifficultyofworkliketemperatureor
humiditynormallydifficulttobear,hazardous
occupationsorprocessesorundergroundwork.
•Whereemployeesareemployedonpiecework,
theappropriateGovernmentshallfixaminimum
rateofwagesforsecuringsuchemployeesa
minimumrateofwagesonatimeworkbasis.
Components of Minimum wage
wageshallbeasnotifiedbythestategovernment
withfollowingthreepossibilities;
1.Basicwageandanallowancesconnectedwith
costIndex(CostofLivingAllowance/Dearness
Allowance/SpecialAllowance)
2.BasicWagewithorWithoutCostofLiving
Allowance
3.All-Inclusive
Wage for Overtime work-Section. 14
Incaseemployeesworkinexcessofanormalworking
day,theywillbeentitledtoovertimewage,whichmust
beatleasttwicethenormalrateofwages.
Explanation:Itshouldbeongrosswageattherateofdouble
rate.
PAYMENTOF MINIMUM WAGES ACT

11. Fines
Absencefrom duty
Accommodationgiven by the
employer, or
Recoveryof advances given to the
employee, among others
•Thesedeductionsshouldnotexceed50%
oftheemployee’stotalwage.
•Whereanydeductionismadebythe
employerfromthewagesofanemployee.
•Nofineshallbeimposedwithout
permissionfromthecompetentauthority
andopportunitytoemployeetoexplainhis
case.Thetotalamountoffinewhichmay
beimposedinanyonewage-periodonany
employeeshallnotexceedanamount
equaltothreepercentages(3%)ofthe
wagespayabletohiminrespectofthat
wage-period.
•Adeductionfordamageorlossshallnot
exceedtheamountofthedamageorloss
causedtotheemployerbynegligenceor
defaultoftheemployee.
Deductions which may be made from wages
PAYMENTOF WAGESACT

12. PAYMENTOF BONUSACT
12
Section Provisions Law andAnnotations
Section26(1)
Eligibilityof
Bonus
Upto21,000GrossSalaryandbetween8.33%to20%aftercompletionof30daysofwork.
Section26(6)
Uptofirst5yearsofoperations–Bonustobepaidonlyinrespectofaccountingyearinwhichemployer
derivesprofitfromsuchestablishment.
Section39(1)
Mode of
Paymentof
Bonus
BonusshouldbepaidinbankAccountonly-Nocashbonuspermissible.
Section26(3)
Bonus
Calculation
Employerhastopaybonustoanemployeemorethanminimumbonus,ifallocablesurplusexceedsthe
amountofminimumbonuspayabletotheemployee(anamountinproportiontothewagesearnedby
theemployeeduringtheaccountingyear).
ForExample:
•AllocableSurplusAmountsisRs.15,00,000/-
•Bonusasper8.33%AmountisRs.10,00,000/-
•InthiscaseBonustobePaid12.50%(AmountinProportiontoSuchwages)Rs.15,00,000/-

13. PAYMENTOF BONUSACT
13
Section Provisions Law andAnnotations
Set On WhenallocablesurplusexceedmaximumBonus,thentheexceedamountsubjecttomax.20%shouldbe
carryingforwardforsetoninnext4accountingyears.
Set OffWhenallocablesurplusisnilorlessthanorequaltotheminimumbonus.Inthiscasethedeficiencyis
carriedforwardtonext4accountingyears.

14. W R I T E Y O U R S U B T I T L E H E R E
ProhibitionofDiscriminationongroundofGender-Section3
•TheCodeprohibitsgenderdiscriminationinmattersrelatedtowagesand
recruitmentofemployeesforthesameworkorworkofsimilarnature.
Workofsimilarnatureisdefinedasworkforwhichtheskill,effort,
experience.
GENDER DISCRIMINATION

15. Non Maintenance or Improper maintenance of
Documents
•Fineuptotenthousandrupees
Less Payment as defined in Code on Wage,2019
•Firstoffence–PenaltyofRs.50,000
Contravenes with any other Provision
•RepetitiveoffencewithinFiveyears,mayleadto
imprisonmentuptothreemonthsandfinemayextend
uptoonelakhrupeesorboth.
•FineuptoRs.20,000
•RepetitiveoffencewithinFiveyears,mayleadto
imprisonmentuptoonemonthandfinemayextend
uptoFortythousandrupeesorboth.
OFFENCESAND PENALTIES

16. WRITE YOUR SUBTITLE HEREFAQ-TheCode on Wages, 2019
WhatisthemeaningofGazette?
Merenotificationinagazettedoesnotprovidestatusoflaw.Termnotification
meansbringtothenoticeofpublic,thuspublicationingazetteimpliesanditis
assumedthatithasbeenbroughttothenoticeofthepublicatlarge,andnone
cantakepleaofbeingunawareorignorant.
ApublicationintheOfficialGazetteviz.,theGazetteofIndiaistheordinary
methodofbringingaruleorsubordinatelegislationtothenoticeofthepersons
concerned.GazetteNotificationisanimportantlegalrequirementtovalidate,
authenticateandtomakeeffectivevariouskindsofLaws,Acts,Rules,Ordersand
Governmentdecisions.
Lawbecomeslawassoonasit'spassedbyparliamentorlegislativeassemblyand
signedbypresidentorGovernor.AnyOrdinancebecomeslawassoonasitssigned
byPresidentorGovernorandithastobepassedbylegislaturewithinsixmonths
otherwiseitexpires.

17. WRITE YOUR SUBTITLE HEREFAQ-TheCode on Wages, 2019
Whatisthepenaltyundercodeonwagebill,2019?
TheCodespecifiespenaltiesforoffencescommittedbyanemployer,suchas(i)
payinglessthantheduewages,or(ii)forcontraveninganyprovisionoftheCode.
Penaltiesvarydependingonthenatureofoffence,withthemaximumpenalty
beingimprisonmentforthreemonthsalongwithafineofuptoonelakhrupees.
Advertisementfortherecruitmentinnews-paperwithgender
specificationisaviolationunderthecodeonwagebill?
PrimafacieYessubjecttorelevantfacts
TheCodeprohibitsgenderdiscriminationinmattersrelatedtowagesand
recruitmentofemployeesforthesameworkorworkofsimilarnature.Workof
similarnatureisdefinedasworkforwhichtheskill,effort,experience,and
responsibilityrequiredarethesame.

18. 18
Thank You.......!!!
And looking forward to help you achieve your goals…!!!