Q) Critically analyse the main provisions of Code on Wages, 2019. Do you think fixing the ‘Floor wage’ will resolve the issue of minimum wages? (250 words)
Why this question?
Three new labour codes (The Industrial Relations Code, the Social Security Code and the Occupational Safety, Health and Working Conditions Code, 2020) were passed by the Parliament. Thus the question.
Introduction: Barring a few new concepts, the Code on Wages, 2019 retains almost all provisions such as the procedure for fixing minimum wage, limit for fines and deductions in wages, minimum and maximum bonus, calculation of allocable and available surplus, as well as gender neutral consideration in fixing wages.
Body: Discuss the following aspects
- Minimum wages
- Definition of worker
- Floor wage
- Enforcement provisions
- Claim mechanism
- Provisions on penalty
- Dual wage rates
- Qualifications of appellate authority
- Exemptions from penalty
- Floor wage: The central government will have the power to fix a “floor wage”. It is unwarranted since many States always fix minimum wages higher than the existing rates, depending upon the employment and workforce involved.
Conclusion: The concept should be for a binding minimum wage and not have dual wage rates — a binding floor wage and a non-binding minimum wage.