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The Code replaces the following four laws: (i) the Payment of Wages Act, 1936, (ii) the Minimum Wages Act, 1948, (iii) the Payment of Bonus Act, 1965, and (iv) the Equal Remuneration Act, 1976.

Whom does the law apply to?

Last updated on Jun 21, 2022

The Code applies to all employees and employers in establishments, i.e., workplaces carrying on any industry, trade, business, manufacture or occupation, including Government offices1. However, the provisions on payment of wages and bonus do not apply to Government establishments unless the concerned Government makes them applicable through a notification.

Employee2

An employee is anyone who an establishment employs and pays wages to do work for hire or reward (this includes Government employees). It does not matter whether the terms of employment are clearly stated (like in a contract) or just implied.

The nature of the work could be:

  • Skilled
  • Semi-skilled or unskilled
  • Manual
  • Operational
  • Supervisory
  • Managerial
  • Administrative
  • Technical
  • Clerical

The following people are not considered employees:

  • Members of the Indian Armed Forces
  • Apprentice engaged under the Apprentices Act, 1961
  • People hired on a retainership basis

Employer3

An employer is someone who employs at least one employee in their establishment. It does not matter whether they employ the person directly or through anyone else, or employ someone on behalf of another person.

 

Type of establishment/work Employer
State or Central Government Department Authority specified by the head of the department. If not specified, it is the concerned chief executive of the department
Factory Occupier or manager of the factory
Any other establishment Person or authority having ultimate control over the establishment, such as a manager or managing director
Contract labour Contractor

 

A legal representative of a deceased employer is also an employer.

  1. Section 2(m), Code on Wages, 2019.[↩]
  2. Section 2(k), Code on Wages, 2019.[↩]
  3. Section 2(l), Code on Wages, 2019.[↩]

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