The minimum wage code bill has been cleared by Union Cabinet and could lead the way for the amalgamation of several different central labour laws. This will considerably improve the ease of doing business, at the same time guaranteeing universal minimum wage to everyone. The bill will now be laid before Parliament in the current monsoon session.
The Code on Wages Bill seeks to authorise the Centre to set a minimum wage across sectors, which means that states will have to uphold it. Since this is in the concurrent list, states can provide a higher minimum wage within their jurisdiction.
If Parliament passes the Bill, workers who earn more than Rs 18,000 monthly, will also be legally eligible to a minimum wage. Current wage laws do not entitle workers getting wages above Rs 18,000. The minimum wage would also apply to all classes of workers, not only for scheduled industries or establishments, as is the case now.
The labour ministry intends to rationalise the definition of wages by consolidating four wage-related statutes, namely, the Minimum Wages Act, 1948, the Payment of Wages Act, 1936, the Payment of Bonus Act, 1965, and the Equal Remuneration Act, 1976. Currently there are several definitions of wages in numerous acts across the Centre and states, making it difficult for employers to deal with.