The Union Cabinet has approved the new wage code bill.
What is the bill about?
It will ensure a minimum wage across all sectors by integrating four labour related laws.
It will consolidate the Minimum Wages Act, 1948; the Payment of Wages Act, 1936; the Payment of Bonus Act, 1965; and the Equal Remuneration Act, 1976.
It signals a formal start of the process of consolidating 44 labour laws into four codes.
At present, every state decides the minimum wage for different industries and labour classifications.
The bill seeks to empower the Centre to set a minimum wage across all sectors in the country and states will have to maintain that.
States will not be able to pay less than the national floor; however, states will be able to provide for higher minimum wage in their jurisdiction than fixed by the central government.
At present, the minimum wages fixed by the Centre and states are applicable only to workers getting up to Rs 18,000 pay monthly.
The new minimum wage norms would be applicable for all workers irrespective of their pay.
The proposed legislation is expected to benefit over 4 crore employees across the country.
What are the concerns with the code?
The point of labour law reform is to make regulation less intrusive and more effective. However, the wage code is doubtful of making this effect.
It seeks to expand the reach of minimum wage regulation to non-formal jobs. The scope for intervention in business by government inspectors has thus been vastly increased.
The code assumes a single national floor for wages for a country as diverse as India, with so many variations to costs of living.
This ignored local and sectoral conditions.
Such regulations have often resulted in the decrease of the number of such jobs.
The code looks less like labour law reform and more like another entitlement which could be counter-productive to the intended aims.
