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Seventh Edition : June 2026
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CHAPTER
DEFINITIONS
1.What is meant by “Wages” according to the Code on Wages, 2019?
Ans.:
Wages [Section 2(y)]: Wages 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, be payable to a person employed in respect of his employment or of work done in such employment.
Wages includes —
(i)Basic pay
(ii)Dearness allowance and
(iii)Retaining allowance
Wages does not include —
(a)Any bonus payable under any law for the time being in force, which does not form part of the remuneration payable under the terms of employment.
(b)Value of any house-accommodation, or of the supply of light, water, medical attendance or other amenity or of any service excluded from the computation of wages by a general or special order of the appropriate Government.
(c)Any contribution paid by the employer to any pension or provident fund, and the interest which may have accrued thereon.
(d)Any conveyance allowance or the value of any travelling concession.
(e)Any sum paid to the employed person to defray special expenses entailed on him by the nature of his employment.
(f)House rent allowance.
(g)Remuneration payable under any award or settlement between the parties or order of a Court or Tribunal.
(h)Any overtime allowance.
(i)Any commission payable to the employee.
(j)Any gratuity payable on the termination of employment.
(k)Any retrenchment compensation or other retirement benefit payable to the employee.
(l)Any ex gratia payment made to him on the termination of employment.
Ceiling on Exclusions: For calculating the wages under this clause, if payments made by the employer to the employee under clauses (a) to (i) exceeds one-half of the all remuneration calculated under the clause, the amount which exceeds such one-half shall be deemed as remuneration and shall be accordingly added in wages.
Gender Equality Clause: For the purpose of equal wages to all genders and for the purpose of payment of wages, the emoluments specified in clauses (d), (f), (g) and (h) shall be taken for computation of wage.
Explanation – Remuneration in Kind: Where an employee is given in lieu of the whole or part of the wages payable to him, any remuneration in kind by his employer, the value of such remuneration in kind which does not exceed 15% of the total wages payable to him, shall be deemed to form part of the wages of such employee.
2.An employee contended that subsistence allowance given during the period of his suspension should be included in his total wages for the purpose of calculation of bonus entitlement. Will he succeed?
[Dec. 2008 (4 Marks)]
Ans.:
The contention of the employee is not tenable, subsistence allowance given during the period of suspension should not be included in the calculation of bonus since the same is not part of wage. [Motor Industries Co. v. Poapt Murlidhar]
3.Define the term “Worker” according to the Code on Wages, 2019.
Ans.:
Worker [Section 2(z)]: Worker means any person (except an apprentice as defined under the Apprentices Act, 1961) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied. Worker includes —
(i)Working journalists as defined in Section 2(f) of Working Journalists & other Newspaper Employees (Conditions of Service) and Miscellaneous Provisions Act, 1955.
(ii)Sales promotion employees as defined in Section 2(d) of the Sales Promotion Employees (Conditions of Service) Act, 1976.
(iii)For the purposes of any proceeding in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched or otherwise terminated in connection with, or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute.
Worker does not include following persons —
(a) Who is subject to Air Force Act, 1950, or Army Act, 1950, or Navy Act, 1957.
(b) Who is employed in the police service or as an officer or other employee of a prison.
(c) Who is employed mainly in a managerial or administrative capacity.
(d) Who is employed in a supervisory capacity drawing wage of exceeding ` 15,000 per month or an amount as may be notified by the Central Government from time to time.
EQUAL REMUNERATION
4. Briefly indicate the purpose of enacting the provisions relating to Equal Remuneration under the Code on Wages, 2019.
[June 1997 (2 Marks)]
Ans.:
Objects of the enacting the provisions relating to Equal Remuneration under the Code on Wages, 2019 are follows:
(1) To provide payment of equal remuneration to men and women workers for same work or work of similar nature without any discrimination.
(2) To prevents discrimination against women employees while making recruitment for the same work or work of similar nature, or in any condition of service subsequent to recruitment.
5. What do you understand by the expression “same work or work of similar nature” under the Code on Wages, 2019?
[June 1999 (5 Marks)], [Dec. 2001 (5 Marks)]
Ans.:
Same work or work of similar nature [Section 2(v)]: Same work or work of similar nature means work in respect of which the skill, effort, experience and responsibility required are the same, when performed under similar working conditions by employees and the difference if any, between the skill, effort, experience and responsibility required for employees of any gender, are not of practical importance in relation to the terms and conditions of employment.
6. What are the duties of employer relating to payment of equal remuneration and recruitment under the Equal Remuneration Act, 1976?
[Dec. 1995 (5 Marks)], [June 2000 (5 Marks)]
Ans.:
Prohibition of discrimination on ground of gender [Section 3]
(1) There shall be no discrimination in an establishment or any of its unit among employees on the ground of gender in matters relating to wages
by the same employer, in respect of the same work or work of a similar nature done by any employee.
(2) No employer shall for the purposes of complying with the provisions equal remuneration, reduce the rate of wages of any employee. No discrimination to be made while recruiting: It is the duty of the employer, not make any discrimination against women while making recruitment for the same work or work of a similar nature.
Same rule applies in any condition of service subsequent to recruitment such as promotions, training or transfer.
This provision does not apply where the employment of women in such work is prohibited or restricted by or under any law for the time being in force.
7. Mohan and Meera both were employed in ABC Ltd. for the performing the same work. Mohan was getting remuneration at a higher rate. For complying with the legal provisions to pay equal remuneration for the same work, the employer reduced the rate of remuneration of Mohan. Was the step taken by the employer proper?
[June 2001 (5 Marks)]
Ans.:
As per Section 3 of the Code on Wages, 2019, there shall be no discrimination in an establishment on the ground of gender in matters relating to wages by the same employer, in respect of the same work or work of a similar nature done by any employee.
No employer shall for the purposes of complying with the provisions equal remuneration, reduce the rate of wages of any employee.
Hence, the act of the employer reducing the remuneration of Mohan is legally wrong.
MINIMUM WAGES
8. Write a short note on: Objects of Fixing Minimum Wages Or
Write a short note on: Philosophy behind provisions relating to Minimum Wages as per the Code on Wages, 2019.
[Dec. 2008 (3 Marks)], [June 2011 (5 Marks)]
Ans.:
Objects of fixing minimum wages are as follows:
(1) To prevent exploitation of labour.
(2) To provide for fixing minimum rates of wages in certain employments.
(3) To empower Appropriate Government to take steps to prescribe minimum rates of wages.
(4) To empower Appropriate Government to give effect to other provisions relating to minimum wages.
9. Discuss briefly provisions relating to fixation and revision of minimum rates of wages under the Code on Wages, 2019. Or
Write a short on: Manner of fixation/revision of minimum wages [Dec. 2009 (5 Marks)], [June 2012 (5 Marks)] Or
Describe the procedure for fixing and revising minimum wages under the Code on Wages, 2019.
[June 2009 (5 Marks)], [Dec. 2010 (5 Marks)] [Dec. 2011 (5 Marks)]
Ans.:
Fixation of minimum wages [Section 6]
(1) Fixation of minimum rate of wages: Appropriate Government shall fix the minimum rate of wages payable to employees in accordance with the provisions of section 8.
(2) Types of minimum wages: For the purposes of fixing minimum rate of wages, Appropriate Government shall fix a minimum rate of wages —
(a) For time work or
(b) For piece work.
(3) Minimum wages for piece work based employee: Where employees are employed on piece work, Appropriate Government shall fix a minimum rate of wages for securing such employees a minimum rate of wages on a time work basis.
(4) Basis of fixation of time work basis: Minimum rate of wages on time work basis may be fixed in accordance with any one or more of the following wage periods:
(i) By the hour or
(ii) By the day or
(iii) By the month.
(5) Manner of calculating wages on time basis: Where the rates of wages are fixed by the hour or by the day or by the month, the manner of calculating the wages shall be such, as may be prescribed.
(6) Factor to be considered by Appropriate Government for fixing minimum rate of wages: For the purpose of fixation of minimum rate of wages following factor can be taken into consideration by the —
(a) Appropriate Government shall primarily take into account the skill of workers required for working under the categories of unskilled, skilled, semi-skilled and highly-skilled or geographical area or both.
(b) Appropriate Government may, in addition to such minimum rate of wages for certain category of workers, take into account their arduousness of work like temperature or humidity normally difficult to bear, hazardous occupations or processes or underground work as may be prescribed by that Government.
(c) Norms of such fixation of minimum rate of wages.
(7) Minimization of Wage Categories: Number of minimum rates of wages may be kept at minimum by the Appropriate Government as far as possible.
Procedure for fixing and revising minimum wages [Section 8]
(1) In fixing minimum rates of wages for the first time or in revising minimum rates of wages, the Appropriate Government can follow either of the two methods described below —
(a) Committee Method: Appropriate Government may appoint as many committees as it considers necessary to hold enquiries and recommend in respect of such fixation or revision minimum rates of wages.
(b) Notification Method: Appropriate Government may by notification publish its proposals for the information of persons likely to be affected thereby and specify a date not less than 2 months from the date of the notification on which the proposals shall be taken into consideration.
(2) Tripartite Constitution of Committee: Every committee appointed by Appropriate Government shall consist of persons —
(a) Representing employers
(b) Representing employees which shall be equal in number of the members
(c) Independent persons, not exceeding 1/3rd of the total members of the committee.
(3) Notification of minimum rates of wages: After considering the recommendation of the committee or all representations received by it before the date specified in the notification, Appropriate Government shall by notification fix or revise minimum rates of wages. Such notification shall come into force on the expiry of 3 months from the date of its issue, unless otherwise provided.
Where the Appropriate Government proposes to revise the minimum rates of wages in the manner specified in Notification Method, it shall also consult concerned Advisory Board.
Review or Revision of minimum wages for every 5 years: Appropriate Government shall review or revise minimum rates of wages ordinarily at an interval not exceeding 5 years.
10. What are the components of minimum wages that are fixed or revised by the Appropriate Government?
Ans.:
(1) Minimum rate of wages: Any minimum rate of wages fixed or revised by the Appropriate Government may consist of:
(a) Basic rate of wages (+) Cost of living allowance.
(b) Basic rate of wages (+) Cost of living allowance (+) Cash value of the concession for supplies of essential commodities at concessional rates.
(
c) All inclusive rate allowing for the basic rate, the cost of living allowance and the cash value of the concessions.
(2) Computation of cost of living allowance and cash value of concessions: Cost of living allowance and the cash value of the concessions in respect of supplies of essential commodities at concession rate shall be computed by such authority, as the appropriate Government may by notification, appoint, at such intervals and in accordance with such directions as may be specified or given by the Appropriate Government from time to time.
11. A company was running into losses and was unable to pay the minimum rates of wages to its workers. The workers pleaded that the employer must pay them the minimum rates of wages. The employer company want to challenge the same before the appropriate authority. Will the company succeed? [June 2010 (4 Marks)]
Ans.:
As per Section 5 of the Code on Wages, 2019, no employer shall pay to any employee wages less than the minimum rate of wages notified by the Appropriate Government.
Minimum wages must be paid irrespective of the extent of profits, the financial condition of the establishment.
Payment of less than the minimum wages notified by the Appropriate Government is an offence.
Thus, even a company running into losses has to pay minimum rates of wages to its workers in accordance with the provisions of the Code on Wages, 2019.
12. Discuss power of Central Government to fix floor wage as contained in Section 9 of the Code on Wages, 2019.
Ans.:
Power of Central Government to fix floor wage [Section 9]
(1) Fixation of floor wage: Central Government shall fix floor wage taking into account minimum living standards of a worker in prescribed manner. However, different floor wage may be fixed for different geographical areas.
(2) Minimum wages fixed by Appropriate Government shall not be less than floor wage: Minimum rates of wages fixed by the Appropriate Government shall not be less than the floor wage and if the minimum rates of wages fixed by the appropriate Government earlier is more than the floor wage, then, the Appropriate Government shall not reduce such minimum rates of wages fixed by it earlier.
(3) Advice of Central Advisory Board & State Governments before fixing floor wages: Central Government may, before fixing the floor wage, obtain the advice of the Central Advisory Board and consult State Governments in prescribed manner.
13. What are the provisions relating to “wages for overtime work” under the Code on Wages, 2019?
Ans.:
Wages for overtime work [Section 14]: Where an employee whose minimum rate of wages has been fixed by the hour, by the day or by such a longer wageperiod, works on any day in excess of the number of hours constituting a normal working day, the employer shall pay him for every hour or for part of an hour so worked in excess, at the overtime rate which shall not be less than twice the normal rate of wages.
Payment for overtime work can be claimed only by the employees who are getting minimum rate of wages under the Act and not by those getting better wages.
PAYMENT OF WAGES
14. What is the time for payment of wages under the Code on Wages, 2019?
Ans.:
Time limit for payment of wages [Section 17]
(1) Time of payment of wages: Employer shall pay or cause to be paid wages to the employees, engaged on —
(i) Daily basis, at the end of the shift.
(ii) Weekly basis, on the last working day of the week, that is to say, before the weekly holiday.
(iii) Fortnightly basis, before the end of the second day after the end of the fortnight.
(iv) Monthly basis, before the expiry of the 7th day of the succeeding month.
(2) Payment of wages within 2 working days in certain cases: In following cases, the employer shall pay wages to employee within 2 working days:
- Removal or dismissal from service or
- Retrenchment or
- Resignation from service
- Unemployment due to closure of the establishment
(3) Power of Appropriate Government to provide other time limit: Appropriate Government may, provide any other time limit for payment of wages where it considers reasonable having regard to the circumstances under which the wages are to be paid.
(4) Provisions of other laws for time limit to be not affected: Nothing contained in Section 17(1) or Section 17(2) shall affect any time limit for payment of wages provided in any other law for the time being in force.
15. Ganesh and his friends are employed in industrial establishment where more than 1,000 workers are working in two shifts. Advice Ganesh as to when he will get the wages for his work in the month of June 2026 keeping in view provisions of the Code on Wages, 2019.
Ans.:
As per Section 17(1) of the Code on Wages, 2019, Employer shall pay or cause to be paid wages to the employees, engaged on —
(i) Daily basis, at the end of the shift.
(ii) Weekly basis, on the last working day of the week, that is to say, before the weekly holiday.
(iii) Fortnightly basis, before the end of the second day after the end of the fortnight.
(iv) Monthly basis, before the expiry of the 7th day of the succeeding month. Thus, workers will receive wages as per above stated provisions.
16. Mr. Sham was terminated from employment by the employer on 25.11.2025. Personnel Manager directed him to collect his wages earned on 1.12.2025. Mr. Sham objected to the date. State legal provisions as to the date of payment under the Code on Wages, 2019.
Ans.:
As per Section 17(2) of the Code on Wages, 2019, where the employment of any person is terminated, wages shall be paid before the expiry of the 2nd working day from the termination of employment.
Hence, Mr. Sham’s objection to the date is correct and acceptable.
17. Sagar Gupta was appointed as Manager in the Factory of XYZ Ltd. He request the legal department of the company to send him note regarding payment of wages to the workers. Advise him suitably keeping in view the provisions of the Code on Wages, 2019.
Ans.:
Mode of payment of wages [Section 15]: All wages shall be paid –
- In current coin or currency notes or by cheque or
- By crediting the wages in the bank account of the employee or
- By the electronic mode.
Appropriate Government may, by notification, specify the industrial or other establishment, the employer of which shall pay to every person employed in such industrial or other establishment, the wages only by cheque or by crediting the wages in his bank account.
18. Explain the deductions that can be made from the wages of an employee under the Code on Wages, 2019.
[Dec. 2021 (3 Marks)], [Dec. 2022 (3 Marks)]
Ans.:
Deductions which may be made from wages [Section 18(1)]:
Only authorized deductions from wages: There shall be no deductions from the wages of employee, except those as are authorized under the Code.
Explanation – What is deemed to be deduction: Any payment made by an employee to the employer or his agent shall be deemed to be a deduction from his wages.
Explanation – What is shall not be deemed to be deduction: Any loss of wages resulting from the imposition, for good and sufficient cause, upon a person employed of any of the following penalties, shall not be deemed to be a deduction from wages, namely:
(i) Withholding of increment or promotion, including the stoppage of an increment.
(ii) Reduction to a lower post or time-scale.
(iii) Suspension.
Permissible deduction [Section 18(2)]: Deductions from the wages of an employee shall be made only for following purposes:
(a) Fines imposed on him.
(b) Deductions for his absence from duty.
(c) Deductions for damage to or loss of goods expressly entrusted to the employee for custody or for loss of money for which he is required to account, where such damage or loss is directly attributable to his neglect or default.
