The Code on Wages, 2019
Act No. 29 of 2019 | Status: Effective
1. Executive Overview
Consolidates 4 Acts. Key shift: Universal applicability to all employees (no wage ceiling) and statutory Floor Wage.
2. Old vs New Comparison
| Provision | Old Regime | New Code |
|---|---|---|
| Wage Ceiling | < ₹24,000 (PW Act) | No Ceiling (Covers Managers) |
| Claim Limitation | 6-12 Months | 3 Years |
| Bonus Disqualification | Fraud/Theft | Added: Sexual Harassment |
| F&F Settlement | Industry Practice | 2 Working Days |
| Inspection | Inspector | Inspector-cum-Facilitator |
3. Definition of Wages (50% Rule)
Wages = Basic + DA + Retaining Allowance
The Cap: If exclusions (HRA, Bonus, OT) exceed 50% of CTC, the excess is added back to Wages.
4. Critical Compliance Changes
- Overtime Rate: Mandatory Double (2x) the normal wage rate.
- Payment Date: Monthly wages must be paid by the 7th.
5. Penalties
| Offense | New Penalty |
|---|---|
| Less Payment | Fine up to ₹50,000 |
| Repeat (5 Years) | Jail up to 3 Months OR Fine ₹1 Lakh |
Need Professional Assistance?
ComplianceAge Solutions can conduct a comprehensive Impact Analysis.
Get a QuoteInfo@complianceage.com | 9967598731