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Labour Codes

As part of its reform initiatives, the labour ministry has decided to amalgamate 44 labour laws into four codes - on wages, industrial relations, social securityand safety, and health and working conditions

Code on Wages Act, 2019

It seeks to regulate wage and bonus payments in all employments where any industry, trade, business, or manufacture is carried out. The Code replaces the following four laws: (i) the Payment of Wages Act, 1936, (ii) the Minimum Wages Act, 1948, (iii) the Payment of Bonus Act, 1965, and (iv) the Equal Remuneration Act, 1976.

  • Central government will fix a floor wage, taking into account living standards of workers.  Further, it may set different floor wages for different geographical area. The minimum wages decided by the central or state governments must be higher than the floor wage.
  • Central or state government may fix the number of hours that constitute a normal working day.  In case employees work in excess of a normal working day, they will be entitled to overtime wage, which must be at least twice the normal rate of wages. 
  • Wages may be deducted on grounds defined in Act, but should never exceed 50% of the total wages
  • The Code prohibits gender discrimination in matters related to wages and recruitment of employees for the same work or work of similar nature
  • Central and state governments will constitute advisory boards
  • Maximum penalty of three months and fine upto one lakh rupees

Code on Social Security Bill, 2019

  • Introduced in the Lok Sabha by the Minister of State for Labour and Employment, but not yet passed.
  • It replaces nine laws related to social security, including the Employees’ Provident Fund Act, 1952, the Maternity Benefit Act, 1961, and the Unorganised Workers’ Social Security Act, 2008.
  • Social security schemes
    • Under the Code, the central government may notify various social security schemes for the benefit of workers.  These include an Employees’ Provident Fund (EPF) Scheme, an Employees’ Pension Scheme (EPS), and an Employees’ Deposit Linked Insurance (EDLI) Scheme. 
    • The government may also notify: (i) an Employees’ State Insurance (ESI) Scheme to provide sickness, maternity, and other benefits, (ii) gratuity to workers on completing five years of employment (or lesser than five years in certain cases such as death), (iii) maternity benefits to women employees, (iv) cess for welfare of building and construction workers, and (v) compensation to employees and their dependants in the case of occupational injury or disease. 
    • In addition, the central or state government may notify specific schemes for gig workers, platform workers, and unorganised workers to provide various benefits, such as life and disability cover. 
      • Gig workers refer to workers outside of the traditional employer-employee relationship (e.g., freelancers).  Platform workers are workers who access other organisations or individuals using online platforms and earn money by providing them with specific services.  Unorganised workers include home-based and self-employed workers. 

Unorganised Workers’ Social Security Act, 2008

  • To provide social security relating to life and disability cover, health and maternity benefits, old age protection to the unorganised workers including domestic workers
  • Constitutes a National Social Security Board  and State Social Security Board to perform function assigned under the Act

[In News]

  • July, 20
    • Domestic workers struggle to make ends meet

Date References