Definition of Wage under Wage Code 2019

[Ramaswamy S]

The definition of wage under the New labour codes is different from the present labour laws.

As per section 2(88) of the Social Security Code (the definition is the same in all the codes)

Wage means - all remuneration, whether by way of salaries, allowances, or otherwise, expressed in terms of money or capable of being so expressed,which would, if the terms of employment, express or implied, were fulfilled, to be payable to a person employed in respect of his employment or of work done in such employment , and includes,-

....

but does not include-

..............

Provided that for calculating the wages under this clause,if payments made by the employer to the employee under sub clauses (a) to (i) exceeds one half, or such other per cent as may be notified by the Central Govt, of all the remuneration calculated under this clause, the amount whcih exceeds one half , or the other percent, so notified, shall be deemed as remuneration and shall be accordingly added in wages under this clause

The query is whether the variable pay is to be considered as wages as per the definition to compute the 50% or not.

Request experts view.

Regards

s ramaswamy

AI Summary

Clarification on Including Variable Pay in Wage Calculation Under Wage Code 2019 With Reference to Section 2(88) A forum participant inquired about whether variable pay should be included in the wage calculation under the Wage Code 2019, specifically regarding the 50% threshold. The definition of wages, as per section 2(88) of the Social Security Code, includes all remuneration but excludes certain specified items. If payments for these excluded items exceed 50% of total remuneration, the excess is considered wages. An expert clarified that if exclusive items like bonuses or allowances exceed this threshold, the excess amount is added to the wages. An example was provided to illustrate this calculation.