Rules for Calculation of Minimum Wage under the Wage Code 2019

🗓️ 05th November 2019

Draft of Wages Code Bill has been made public for comments by the Ministry of Labour and Employment. Following are the provisions of the draft code bill: 

  • The criteria for calculating the minimum wages will include: – 
  • Net intake of 2,700 calories per day 
  • 66 meters cloth per year per standard working-class family 
  • housing rent expenditure as 10% of food and clothing expenditure etc. 
  • expenditure for children education, medical requirement, recreation and expenditure on contingencies to constitute 25% of minimum wages  
  • fuel, electricity and other miscellaneous items of expenditure to constitute 20% of minimum wage 
  • The minimum working hours have been increased from 8 to 9 among other key highlights of the draft bill. 
  • Three adult consumption units apart from the earning member of the family, minimum living standards. 
  • For fixing the minimum wage, the draft rules have also divided the geographical regions into three categories — metropolitan area (area having a population of 40 lakhs or more comprised in one or more districts), non-metropolitan area (area having a population of between 10 lakhs to 40 lakhs) and rural area. 
  • Dearness Allowance would be revised once before April 1 and October 1. 
  • An employee shall be allowed a day of rest every week (hereinafter referred to as “the rest day”). 

 Background of the News –– 

  • In July, Parliament has approved the Code on Wages Bill 2019.  

 Features of Code on Wages Bill 2019 

  • It enables the Centre to fix national minimum wages for the entire country.  
  • It combines the Payment of Wages Act (1936), the Minimum Wages Act (1948), Payment of Bonus Act (1965) and Equal Remuneration Act (1976) into one code.  
  • The government has proposed to streamline 44 labor laws into a set of 4 labor codes out of which code on wages is one code.  
  • 4 proposed laws –Industrial Relations Code Bill, Wage Code Bill, Small Factories (Regulation of Employment and Conditions of Services) Bill, and Employees Provident Fund and Miscellaneous Provisions (Amendment) Bill that would deal with wages, social security and welfare, safety and industrial relations.  
  • Centre will fix minimum wages for certain sectors, including railways and mines.   
  • States can also set minimum wages for other categories of employment.   
  • The minimum wage should be revised every 5 years.  

Month: Current Affairs – November 2019 

Categories: Banking & Economy

Important Points: Draft of Wages Code Bill, Ministry of Labour and Employment, consumption units, metropolitan area, rural area, Dearness Allowance, Payment of Wages Act, Minimum Wages Act, Payment of Bonus Act


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