The bill aims to transform the old and obsolete labour laws into more accountable and transparent ones and seeks to pave the way for the introduction of minimum wages and labour reforms in the country. Law would benefit about 50 crore workers.
Provisions:
- It regulates the wages and bonus payments in all employments where any industry, trade, business, or manufacturing is being carried out.
- Subsumes relevant provisions of
- Minimum Wages Act, 1948,
- Payment of Wages Act 1936
- Payment of Bonus Act, 1965
- Equal Remuneration Act 1976
- Universalizes provisions of minimum wages and timely payment of wages to all employees irrespective of the sector and wage ceiling and seeks to ensure “Right to Sustenance” for every worker and intends to increase the legislative protection of minimum wage.
- Ensured in the bill that
- monthly salary by 7th of next month.
- weekly basis salary on the last day of the week.
- daily wage on the same day.
- Bill will apply to all the employees.
- At present, the provisions of both the Minimum Wages Act and Payment of Wages Act apply on workers below a particular wage ceiling working in Scheduled Employments only.
- Many unorganized sector workers like agricultural workers, painters, persons working in restaurants and dhabas, chowkidars, etc. who were out of the ambit of minimum wages will get legislative protection of minimum wages after the bill becomes an Act.
- Floor Wages:
- Central Government fixes.
- Based in living standards of workers.
- Based on the skill of the workers.
- Based on geographical areas.
- Minimum wages decided by the central or state governments must be higher than the floor wage.
Potential of the wages Code:
- Addresses Under-payments:
- According to the Periodic Labour Force Survey 2017-18, 45% of regular workers are paid less than the minimum wage.
- Better compliance:
- Because of easily comprehendible national wage floor.
- End to Gender Discrimination:
- At the moment, women earn roughly 45% less than men in the same occupation.
- Reduces rural-urban gaps due to national wage floor.
- Problem of Multiple Minimum Wages solved.
- Currently, states fixing rates for 1,709 Scheduled employments, while Centre for 45.
- Improves standard of living of worker
- Due to increase in the purchasing power of the worker.
Shortcomings of the Code:
- Only a meagre increase of current minimum wage.
- Law increases the prevailing minimum wage standard by a paltry ₹2 a day.
- Increases input costs for a business.
- Leading to less labour hiring and resulting in unemployment.Chances of Bankruptcy in labour intensive factories.
- Outsourcing/contract jobs increases.
- Companies move their facilities to countries where labour costs are lower.
- Inflation increases.
- Implementation challenges.
- For example, The Office of the Commissioner of Maharashtra observed in 2011 that the multi-functioning, meagerly staffed labour inspectorate in the State would take three years for to make one visit per inspector of the 5,062 sites in the non-universalized minimum wage system.
Measures needed:
- More autonomy to states.
- According to the Confederation of Indian Industries (CII), states should have the power to determine minimum wages as the concept of a national minimum wage will affect job creation.
- A survey suggested the government should notify a “national floor minimum wage” across five regions, after which States can fix their own minimum wages.
- Should cover both the organized as well as the unorganized sector encompassing all employments.
- NOTE : MGNREGA doesn’t come under Minimum wages. ( It is decided by Labour Ministry )
- Flexibility:
- Mechanism for regular adjustment of minimum wages.
- National-level dashboard that States can access and update.
- Efficient Grievance Redressal:
- Toll-free number to lodge complaints about non-payment of minimum wages.
Conclusion:
An effective minimum wage policy is a potential tool not only for the protection of low paid workers but is also an inclusive mechanism for more resilient and sustainable economic development.
UPSC CSE Notes 