Universal minimum wage coverage
Section 5 of the Code on Wages, 2019 prohibits wage discrimination and establishes a right to minimum
wages for all employees across all sectors, organized and unorganized -- a major expansion from the earlier
Minimum Wages Act, 1948, which covered only specifically “scheduled” employments, leaving a large
share of the workforce outside statutory minimum-wage protection.
The National Floor Wage
Section 9 introduces a statutory National Floor Wage, set by the Central Government with reference to
minimum living standards, below which no state government can fix its own minimum wage -- intended to reduce
regional wage undercutting. The specific rupee figure is revised periodically by the Central Government and
can vary by geographic zone, so the current notified rate should always be checked directly rather than
assumed fixed. For NRI-owned businesses employing staff in India across multiple states, this floor removes
some of the earlier state-to-state wage-setting unpredictability, though employers should still track each
state's own minimum-wage notifications, since a state can always set its rate above the national floor.
Timely payment of wages and statutory bonus
Section 17’s timely-payment protections now apply to all employees regardless of wage level -- the
earlier Payment of Wages Act, 1936 had capped this protection at workers below a specified monthly wage. Under
the Code, daily-wage workers must be paid at the end of the shift, weekly-wage workers before the weekly
holiday, fortnightly-wage workers within two days of the wage period ending, monthly-wage workers within seven
days of the following month, and on termination, resignation, or retrenchment, wages must be paid within two
working days. Section 3 also extends equal-remuneration protection explicitly to cover gender including
transgender identity, updating the older Equal Remuneration Act, 1976 framework. A statutory annual bonus,
ranging from a minimum of 8.33% to a maximum of 20% of wages earned, applies to eligible employees who worked
at least 30 days in the accounting year.
Does the Code on Wages apply to unorganized-sector and gig workers too?
The minimum-wage protection under Section 5 extends to employees across organized and unorganized sectors
generally -- separate provisions in the Code on Social Security, 2020 additionally create a dedicated social
security framework specifically for gig and platform workers, which is distinct from the wage protections
under the Code on Wages.
How quickly must my employer pay my final wages after I resign?
Under Section 17 of the Code on Wages, wages must be paid within two working days of termination,
resignation, or retrenchment -- a change from the earlier patchwork of state-specific timelines, and this
timeline now applies regardless of the employee’s wage level.
Is the National Floor Wage the same amount everywhere in India?
No -- the Central Government sets the National Floor Wage with reference to minimum living standards and
it can vary by geographic zone; it functions as a floor below which no state can set its own minimum wage,
rather than a single uniform national figure, and the exact current rate should be checked against the
latest Central Government notification.
