Wages II: The Minimum Wages Act 1948, the Payment of Wages Act 1936, the Payment of Bonus Act 1965 and the Equal Remuneration Act 1976, and the Code on Wages 2019

The Minimum Wages Act 1948 provides for fixing minimum rates of wages in "scheduled employments" — the employments listed in its Schedule, Part I covering industrial and other employments and Part II agriculture — to which the appropriate government may add others by notification; it was aimed at sweated industries where labour was unorganised and wages were lowest. The appropriate government fixes the minimum rates and must review and revise them at intervals not exceeding five years (section 3). A minimum rate may be a time rate, a piece rate, a guaranteed time rate for piece workers, or an overtime rate, and it may consist of a basic rate with a special allowance (a cost-of-living or variable dearness allowance adjusted to the price index), or an all-inclusive rate (section 4). Rates are fixed by one of two methods (section 5): the committee method, in which committees and sub-committees hold inquiries and advise, or the notification method, in which the government publishes its proposals and considers representations before fixing the rates. Advisory boards in the states and a Central Advisory Board coordinate the work (sections 7 and 8). Minimum wages are ordinarily payable in cash; the Act also regulates the normal working day, weekly rest and overtime, and a claims authority (section 20) hears claims for underpayment.

The Payment of Wages Act 1936, a recommendation of the Royal Commission on Labour, protects wages already earned: it ensures they are paid regularly, in full and without unauthorised deductions. It applies to persons employed in factories, railways and other notified establishments whose wages are below a ceiling notified by the Central Government (₹24,000 a month since 2017). The employer (and in a factory the manager) is responsible for payment (section 3). No wage period may exceed one month (section 4). Wages must be paid before the expiry of the seventh day after the last day of the wage period in an establishment employing fewer than 1,000 persons, and before the tenth day in others; wages of a worker whose employment is terminated must be paid within two working days (section 5). Wages are paid in current coin or currency notes, or by cheque or credit to a bank account (section 6). Only the deductions the Act authorises may be made (section 7): fines, deductions for absence from duty, for damage or loss of goods entrusted to the employee, for housing and amenities supplied, for recovery of advances and loans, income tax, deductions under court orders, and contributions to provident funds, cooperative societies and insurance. The total deductions in a wage period may not exceed 50 per cent of the wages, or 75 per cent where they include payments to cooperative societies. Fines may be imposed only for acts or omissions specified in an approved notice, after giving the worker a hearing, and may not exceed three per cent of the wages payable in the wage period (section 8).

Bonus in India began as an ex gratia payment and became, through the Full Bench Formula of the Labour Appellate Tribunal (1950) and the Bonus Commission (1964), a statutory share in profits with a guaranteed minimum; the Payment of Bonus Act 1965 followed. It applies to every factory and every other establishment in which twenty or more persons are employed on any day during an accounting year. An employee is eligible if his salary or wage does not exceed ₹21,000 a month (the ceiling since the 2015 amendment, effective from 1 April 2014) and he has worked for at least thirty working days in the year (section 8); he is disqualified if dismissed for fraud, riotous or violent behaviour on the premises, theft, misappropriation or sabotage (section 9). Where his salary exceeds ₹7,000 a month, or the minimum wage for the employment if that is higher, the bonus is calculated as if his salary were ₹7,000 or that minimum wage (section 12). The minimum bonus is 8.33 per cent of the salary or wage earned in the year, or ₹100, whichever is higher, and is payable whether or not there are profits (section 10); the maximum is 20 per cent (section 11). Between these the bonus depends on the "allocable surplus", a share (67 per cent for some companies, 60 per cent in other cases) of the "available surplus" computed from gross profits, and excess or deficiency is carried forward by set-on and set-off up to the fourth accounting year (section 15). Bonus must be paid within eight months of the close of the accounting year (section 19). A new establishment is exempt for its first five accounting years except in a year in which it makes a profit (section 16).

The Equal Remuneration Act 1976 began as an ordinance issued in International Women's Year (1975), giving effect to Article 39(d) and to ILO Convention 100 (1951), which India had ratified in 1958. It requires every employer to pay men and women workers remuneration at rates no less favourable for the same work or work of a similar nature (section 4), and forbids discrimination against women in recruitment and in conditions of service after recruitment, such as promotion, training and transfer, except where the employment of women is prohibited or restricted by law (section 5). "Same work or work of a similar nature" means work in which the skill, effort and responsibility required are the same when performed under similar working conditions, and in which any differences are not of practical importance. The Act provides for advisory committees to promote employment opportunities for women (section 6). In Mackinnon Mackenzie and Co. v. Audrey D'Costa (1987), the Supreme Court held that lady stenographers doing the same work as male stenographers were entitled to the same pay, and that an employer cannot escape the Act by pleading a settlement with the union or his financial difficulty.

The Code on Wages 2019 consolidates the four Acts and applies them to all employees, in the organised and unorganised sectors, rather than to scheduled employments or to workers below a wage ceiling. It gives one definition of "wages": all remuneration expressed in money, including basic pay, dearness allowance and retaining allowance, but excluding items such as bonus, house rent allowance, conveyance allowance, overtime allowance, commission, the employer's contribution to provident fund and pension, gratuity and retrenchment compensation; if the excluded payments (other than certain specified ones) exceed one-half of all remuneration, the amount by which they exceed it is added back as wages. This "50 per cent rule" stops employers from keeping basic pay low and paying the rest as allowances, which would otherwise shrink provident fund, gratuity and bonus. The Code provides a minimum wage for every employee, fixed by the appropriate government on time or piece basis by reference to skill (unskilled, semi-skilled, skilled and highly skilled), geographical area, or both, and revised ordinarily at intervals not exceeding five years; and a floor wage fixed by the Central Government, taking into account the minimum living standards of a worker, which may differ between geographical areas and below which no minimum wage may be fixed. (A non-statutory National Floor Level Minimum Wage had been announced since 1996.)

The Code keeps the payment rules in a single form: wages are paid daily at the end of the shift, weekly on the last working day of the week, fortnightly before the end of the second day after the fortnight, and monthly before the seventh day of the following month; on removal, dismissal, retrenchment or resignation, within two working days; total deductions may not exceed 50 per cent of wages. Its bonus chapter keeps the twenty-employee coverage, the thirty-day eligibility, the minimum of 8.33 per cent and the maximum of 20 per cent, with the eligibility and calculation ceilings to be notified by the appropriate government. Its non-discrimination section forbids discrimination among employees on the ground of gender, in wages and in recruitment, for the same work or work of a similar nature, widening the Equal Remuneration Act's rule beyond men and women. Overtime is paid at not less than twice the normal rate. Inspectors become inspector-cum-facilitators, and a first offence may be compounded.