Code On Wages, 2019

Date of Notification

Implementation

21^st November, 2025

• Section 1 to 41: Provisions relating to definition of wages, prohibition of discrimination on ground of gender, minimum wages (payment, fixation, floor wage, hours of work, overtime, etc.)
• Section 42(4) to 42(9): Composition of state advisory board and bodies
• Section 43 to 66: Provisions related to payment of undisbursed dues, reference of disputes, appeal, records, returns and notice, offences, compounding, etc.
• Section 67(1); 67(2) (a) to (r) & (u) to (zc); 67(3) to 67(5) – Rule making power of government
• Section 68: Power to remove difficulties
• Section 69: Repeal and savings

The above provisions have come into force in addition to the provisions that were notified vide notification dated 18^th December, 2020.

List of Repealed Acts

a) Payment of Wages Act, 1936

b) Minimum Wages Act, 1948

c) Payment of Bonus Act, 1965

d) Equal Remuneration Act, 1976

Section

What's New

Action Point for Employers

Employees -Section 2(k)

Provisions relating to timely payment of wages, authorised deductions, etc. which were applicable only in respect of employees drawing INR 24,000 (approximately USD 270) per month, are now applicable to all employees.

Compliance with the obligations with respect to payment of wages are to be ensured irrespective of the wages drawn.

Wages - Section 2(y)

Standard definition of wages in all Codes and cap of exclusions at 50% to prevent misuse while payment of various entitlements.

Assess the wage structure of the employees and the financial impact on benefits such as gratuity, bonus, provident fund, etc.

Payment of minimum rate of wages - Section 5

In the earlier regime, minimum wages applied only to scheduled industries/employments; large sections of workers remained uncovered.

The new provision guarantees all workers a statutory right to minimum wages.

Assessment of financial impact in case of minimum wages were not applicable previously.

Fixing hours of work for normal working day - Section 13

While the provisions largely remain unchanged as provided in the earlier regime, the applicable rules would have to be considered in order to ensure compliance.

Assessment once the applicable rules come into force to ascertain compliance.

Wages for overtime work - Section 14

No change in the rate of overtime paid (twice the normal wage), however the applicable rules would have to be considered in order to ensure compliance.

Assessment once the applicable rules come into force to ascertain compliance.

Time limit for payment of wages - Section 17

Timelines for payment of wages which were limited to certain categories of employees have now been made applicable to all employees.

Payment of the full and final settlement of dues within 2 days on separation which was earlier limited to termination has now been extended to resignation as well.

Review of payroll practices to ensure compliance with timely payment of wages to all employees including at time of separation.

Mode of payment of wages - Section 15

Wage Code recognises payment of wages in electronic mode. For the first time, electronic payment has been statutorily recognised in labour laws.

Deductions which may be made from wages - Section 18

These provisions were applicable under Payment of Wages Act, 1936 to employees earning monthly wages below INR 24,000 (approximately USD 270).

Due to removal of wage threshold, the provision applies to all employees.

Review of payroll and HR compliances in relation to authorised deduction for all employees.

Eligibility for bonus, etc - Section 26 & 29

The salary threshold set by the government under the rules/notification for statutory bonus eligibility shall determine the net of bonus obligations.

Assessment of financial impact due to payment of statutory bonus depending on the salary threshold.

Records, returns and notices - Section 50

Obligations to maintain records, registers, etc. remain largely unchanged, however, the applicable rules would have to be considered in order to ensure compliance.

While the information collection process in relation to maintenance of registers and records may not be impacted, assessment should be done once the applicable rules come into force to determine the manner of compliance.

Increased penalties for non-compliance - Section 54 & 45

Penalties have been substantially increased and range from INR 50,000 (approximately USD 560) to INR 1,00,000 (approximately USD 1120) and also include imprisonment of up to 3 months, depending on the nature of offence.

Assessment of compliances to understand potential liabilities in case of non-compliance.