THE CODE ON WAGES, 2019 – AN OVERVIEW

There were many labour laws prevailing in our country that were enacted before independence and enacted after independence.  Nearly 29 acts were enacted in respect of labour.   The second National Commission on Labour had recommended that the existing Labour Laws should be broadly grouped into four or five Labour Codes on functional basis.

Major law reforms were brought in our country during the year 2019.  Maximum laws were consolidated and put in the following four codes-

• The Code on Wages, 2019;
• The Code on Social Security, 2020;
• The Industrial Relations Code, 2020;
• Occupational Safety, Health and Working Conditions Code, 2020.

Though the provisions of the above said codes came into effect in the year 2020, the rules for the said Codes have been framed only during the current year.  It establishes universal minimum wages, standardizes the definition of 'wages', prevents gender discrimination in employment, and streamlines compliance for employers across the country.

In this article the overview of the Code and Rule ‘Code on Wages (Central) Rules, 2026 which came into effect from 08.05.2026, the date of notification of the rule.

The Code on Wages, 2019 was enacted consolidating the following laws-

• The Payment of Bonus Act, 1936;
• The Minimum Wages Act, 1948;
• The Payment of Bonus Act, 1965; and
• The Equal Remuneration Act, 1976.

This code regulates the wages and bonus payments across all sectors. It applies to all employees in both organised and unorganised sectors.   It forms the foundational pillar of India's, aimed at simplifying compliance, ensuring fair remuneration, and extending protections to all workers, including those in the unorganised sector. Major provisions came into effect on 21 November 2025, aligning with the implementation of the broader labour codes in India. As of January 2026, the Code is in force.  The Code on Wages, 2019 is a step to advance equity and labour welfare while ensuring enterprise sustainability. It standardizes definitions of key terms and streamlines procedures, reducing ambiguity and ensuring faster, time bound justice for employers. The bigger aim of the labour reforms is to drive economic growth through generation of decent employment opportunities for all.  

The Code on Wages (Central) Rules, 2026 was framed by the Central Government in supersession of the following Rules-

1. The Payment of Wages (Procedure) Rules, 1937;
2. The Payment of Wages (Railways) Rules, 1938;
3. The Minimum Wages (Central) Rules, 1950;
4. The Payment of Wages (Mines) Rules, 1956;
5.  The Payment of Wages (Procedure) Application to Scheduled employments Rules, 1962;
6. The Payment of Wages (Manner of Recovery of excess Deductions) Rules, 1966;
7. The Payment of Wages (Air Transport Services) Rules, 1968;
8. The Payment of Wages (Deductions for National Defence Fund and Defence Savings Scheme) Rules, 1972;
9. The Payment of Bonus Rules, 1975;
10.  The Equal Remuneration Rules, 1976; and
11. The Payment of Undisbursed Wages (Air Transport Services) Rules, 1988;
12. The Payment of Undisbursed Wages (Mines) Rules, 1989;
13.  The Central Advisory Committee on Equal Remuneration Rules, 1991;
14. The Payment of Wages (Nomination) Rules, 2009;
15. The Minimum Wages (Central Advisory Board) Rules, 2011
16. The Code on Wages (Central Advisory Board) Rules, 2021;
17. The Ease of Compliance to Maintain Register under Equal Remuneration Act, 1976, Minimum Wages Act, 1948 and the Payment of Wages Act, 1936.

Features of the Code

The following are the salient features of the Code on Wages,2019 (‘Code’ for short)-

• Universal Minimum Wages;
• National Floor Wages;
• Uniform definition for Wages;
• Timely payment of Wages;
• Equal Remuneration;
• Bonus provisions;
• Inspector-cum-facilitator.

Framework of the Code

The Code contains IX Chapters and 69 sections.

• Chapter I – Preliminary (Sections 1 to 4);
• Chapter II – Minimum Wages (Sections 5 to 14);
• Chapter III – Payment of Wages (Section 15 – 25);
• Chapter IV – Payment of Bonus (Sections 26 – 41);
• Chapter V – Advisory Board (Section 42);
• Chapter VI – Payment of dues, claims and Audit (Sections 43 to  50);
• Chapter VII – Inspector – cum – Facilitator (Section 51);
• Chapter VIII – Offences and Penalties (Sections 52 to 56);
• Chapter IX – Miscellaneous – (Section 57 to 69).

Power to make Rules

Section 67 of the Code gives powers to the appropriate Government to frame rules in relations of the matters from Section 67(2)(a) to (i).  Therefore, the Central Government as well State Governments may frame rules for the purpose of this Chapter.

Framework of the Rules

The Central Government made rules entitled ‘Code of Wages (Central) Rules, 2026 vide Notification No. GSR 343 (E), dated 08.05.2026.  The Rule contains VIII chapters and 54 Rules. 

• Chapter I – Preliminary – Rule 1 and 2;
• Chapter II – Minimum Wages – Rules 3 to 9;
• Chapter III – Floor Wages – Rule 10;
• Chapter IV- Payment of Wages – Rule 11  to 20;
• Chapter V – Payment of Bonus – Rule 21 to 28;
• Chapter VI – Central Advisory Board –

Part A – Procedure of Central Advisory Board (Rule 29 to 37);

Part B – Terms of office of members of Board (Rules 38 to 44);

• Chapter VII – Payment of Dues, claims etc. (Rule 45 to 47);
• Chapter VIII – Forms and Wages slip (Section 48 to 54).

Conclusion

The Code on Wages, 2019 is a landmark reform that modernizes India’s wage system by ensuring fair wages, equality, and transparency, while also making it easier for businesses to comply with labour laws.