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Seeking Inputs: Draft Code on Wages (Central) Rules, 2020

Dear all,

The Ministry of Labour and Employment has recently published the draft Code on Wages (Central) Rules 2020, seeking inputs from the stakeholders. The Rules prescribes for the process and fixation of calculating the Minimum Rate of Wages, process of making payment, process of constituting the Central Advisory Board for the purpose of fixing Floor Wage, procedure of deduction of wage and recovery etc.

A brief summary of key provisions of the Rules are mentioned below:

  1. Manner of fixing Minimum Wages:
  • The rules prescribe for the manner of calculating the minimum wages based on the certain criteria which includes standard working-class family, their daily calorie intake (2700 per da7) and other expenses such as house rent, fuel, education, electricity etc.
  • Further, different minimum wages can also be fixed depending upon the geographical areas such as Metropolitan, non-metropolitan and rural areas as well as the skills of the employees i.e. unskilled, semi-skilled, skilled and highly skilled.
  • The rules prescribe for the payment of Dearness Allowance (DA) to be paid on the Minimum Wage. DA to be revised every year once before 1st April and then before 1st October
  1. Working Hours and Overtime
  • As per the rules, a normal working day shall comprise of eight working hours and one or more interval of rest to a maximum of 1 hour. Further, spread over in any day cannot exceed beyond twelve hours with certain exceptions.
  • Overtime shall also be required to paid which cannot be less than twice the normal rate of wages
  • The rules also prescribe for weekly day off for the employees.
  1. Process of fixing Floor Wage:
  • The rule also prescribes the process of constituting the Central board for the purpose of fixing Floor wage, which shall be fixed taking into the consideration of minimum standard of living and other factors as may be prescribed by the Central Government
  • Floor wage so fixed cannot be less than the Minimum Wages and may be revised at a time interval not exceeding five years. Different Floor wages can also be prescribed for different geographical areas.
  1. Process of deduction and recovery
  • The rule also prescribes the manner and conditions for making any deduction from the wages including the procedure of recovery towards any advance or damage or loss incurred by the employee.
  1. Wage Slip
  • Employer is mandated to issue wage slips on or before payment of wages either electronically or otherwise.
  1. Inspection Scheme:
  • The Rule also prescribe for the formulation of an inspection scheme for the purpose of generation of web-based inspection and calling of information to the inspection with the approval of Central Government.

The last date of sending inputs to the Government is August 21st 2o20, you are requested to kindly share your inputs with us latest by August 5, 2020 as per the below format.

Kindly email your inputs to deepak@nasscom.in and jayakumar@aditi-mnasscom-in

Code on Wages (Central) Rule, 2020

Section /Sub-Section /Clause /Proviso of the RuleIssue / problem in the relevant RuleProposed change / correction that is suggestedReason for the proposed change

Copy of the draft Rules can be accessed from here.

We look forward to your response.

Regards

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