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To protect the interest of stakeholders and to provide security to labour, there are many labour laws in India. Hence many laws are there, Government keeps amending them time after time, consequently Acts and rules have become complex. Not only complexity we even see duplicity in various labour laws. To solve this issue and to make various labour laws simple Government of India has undertaken the exercise of rationalisation of the 38 Labour Acts by framing 4 labour Codes-

1- Labour Code on Wages: This code will supersede following 4 Acts-

i- The Minimum Wages Act, 1948;
ii- The Payment of Wages Act, 1936;
iii- The Payment of Bonus Act, 1965; and
iv- The Equal Remuneration Act, 1976

2- Labour Code on Industrial Relations: It will supersede following 3 labour laws-

i- Trade Union Act, 1926,
ii- the Industrial Employment (Standing Order) Act, 1946; and
iii- The Industrial Disputes Act, 1947

3- Labour Code on Social Security: This code will be in place of 15 labour Acts-

15 Labour Laws including EPF Act, ESI Act, Maternity Benefit Act, Payment of Gratuity Act, Employees Compensation Act, Unorganised Social Security Act, and various Welfare Cess /Fund Acts)

4- Labour Code on occupational safety, health and working conditions: Rest 16 Acts will be repealed by this Act, which can be listed out after bill comes.

Two out of these four Codes (Labour Code on Wages and labour Code on Industrial Relations) have been drafted as bills. The Code on Wages Bill 2017 is being taken on priority and has been introduced in Lok Sabha on 10th August, 2017.

The Codification of the Labour Laws will remove the multiplicity of definitions and authorities leading to ease of compliance without compromising wage security and social security to the workers. At present, the provisions of the Minimum Wages Act and the Payment of Wages Act do not cover substantial number of workers, as the applicability of both these Acts is restricted to the Scheduled Employments / Establishments. However, the new Code on Wages will ensure minimum wages to one and all and timely payment of wages to all employees irrespective of the sector of employment without any wage ceiling.

A concept of statutory National Minimum Wage for different geographical areas has been introduced. It will ensure that no State Government fixes the minimum wage below the National Minimum Wages for that particular area as notified by the Central Government.
The proposed payment of wages through cheque or digital/ electronic mode would not only promote digitization but also extend wage and social security to the worker. Provision of an Appellate Authority has been made between the Claim Authority and the Judicial Forum which will lead to speedy, cheaper and efficient redressal of grievances and settlement of claims.

Labour Code on Wages comprises total 68 sections and 4 schedules. Penal provisions in the Code are strict in nature, which include heavy penalty with fine which may extend to 1 lakh rupees and imprisonment for a term which may extend to three months.

Disclaimer: This is an effort by  to contribute towards improving compliance management  regime. User is advised not to construe this service as legal opinion and is advisable to take a view of subject experts. 

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