The New Code on Wages in India: Bridging gaps in wage regulation

The Code on Wages, 2019 represents a pivotal reform in India’s labour ecosystem, aiming to streamline and modernize wage regulation through the consolidation of four major legislations: the Minimum Wages Act (1948), the Payment of Wages Act (1936), the Equal Remuneration Act (1976), and the Payment of Bonus Act (1965). By introducing a universal minimum wage applicable to all workers, irrespective of industry or wage ceiling, the code seeks to address wage inequalities, particularly in the informal sector, which constitutes the majority of India's workforce. Key provisions include a national floor wage, enhanced worker protections, and gender pay parity, aligning with international labour standards. The reforms promise to reduce compliance complexity for employers while promoting worker welfare. However, challenges such as regional disparities in wage implementation, ambiguities in the floor wage mechanism, and weak enforcement mechanisms raise concerns about achieving equitable outcomes. This article critically evaluates the code’s impact on stakeholders, including workers, employers, and policymakers, and underscores the importance of effective implementation and intergovernmental coordination to ensure the code fulfils its potential in driving inclusive economic growth and labour equity.