Why in news?
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.
Source: Business Standard
