Code on Wages, 2019
An Act to amend and consolidate the laws relating to wages and bonus and matters connected therewith or incidental thereto.
TaxByKK · Laws by Sector · taxbykk.comIndex as on 21th November, 2025
Index of provisions · 9 chapters, 69 sections
Chapter I Preliminary4 sections
Chapter II Minimum Wages10 sections
- 5Payment of minimum rate of wages
- 6Fixation of minimum wages
- 7Components of minimum wages
- 8Procedure for fixing and revising minimum wages
- 9Power of Central Government to fix floor wage
- 10Wages of employee who works for less than normal working day
- 11Wages for two or more classes of work
- 12Minimum time rate wages for piece work
- 13Fixing hours of work for normal working day
- 14Wages for overtime work
Chapter III Payment of Wages11 sections
- 15Mode of payment of wages
- 16Fixation of wage period
- 17Time limit for payment of wages
- 18Deductions which may be made from wages
- 19Fines
- 20Deductions for absence from duty
- 21Deductions for damage or loss
- 22Deductions for services rendered
- 23Deductions for recovery of advances
- 24Deductions for recovery of loans
- 25Chapter not to apply to Government establishments
Chapter IV Payment of Bonus16 sections
- 26Eligibility for bonus, etc
- 27Proportionate reduction in bonus in certain cases
- 28Computation of number of working days
- 29Disqualification for bonus
- 30Establishments to include departments, undertakings and branches
- 31Payment of bonus out of allocable surplus
- 32Computation of gross profits
- 33Computation of available surplus
- 34Sums deductible from gross profits
- 35Calculation of direct tax payable by employer
- 36Set on and set off of allocable surplus
- 37Adjustment of customary or interim bonus against bonus payable under this Code
- 38Deduction of certain amounts from bonus payable
- 39Time limit for payment of bonus
- 40Application of this Chapter to establishments in public sector in certain cases
- 41Non-applicability of this Chapter
Chapter V Advisory Board1 section
- 42Central Advisory Board and State Advisory Boards
Chapter VI Payment of Dues Claims and Audit8 sections
- 43Responsibility for payment of various dues
- 44Payment of various undisbursed dues in case of death of employee
- 45Claims under Code and procedure thereof
- 46Reference of disputes under this Code
- 47Presumption about accuracy of balance sheet and profit and loss account of corporations and companies
- 48Audit of account of employers not being corporations or companies
- 49Appeal
- 50Records, returns and notices
Chapter VII Inspectory-cum-facilitator1 section
- 51Appointment of Inspector-cum-Facilitators and their powers
Chapter VIII Offences and Penalties5 sections
Chapter IX Miscellaneous13 sections
- 57Bar of suits
- 58Protection of action taken in good faith
- 59Burden of proof
- 60Contracting out
- 61Effect of laws agreements, etc., inconsistent with this Code
- 62Delegation of powers
- 63Exemption of employer from liability in certain cases
- 64Protection against attachments of assets of employer with Government
- 65Power of Central Government to give directions
- 66Saving
- 67Power of appropriate Government to make rules
- 68Power to remove difficulties
- 69Repeal and savings
About this Act
The Code on Wages, 2019 brings the law on wages and bonus into a single statute. It replaces four older labour laws: the Payment of Wages Act, 1936, the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965 and the Equal Remuneration Act, 1976.
The Code has 69 sections in nine chapters. It begins with a bar on gender discrimination in wages, then deals with minimum wages and the Central Government's floor wage, the timing and mode of wage payment and permitted deductions, and the eligibility and computation of bonus.
Later chapters set up Central and State Advisory Boards, provide for claims and audit of employer accounts, replace the traditional Inspector with an Inspector-cum-Facilitator, and lay down offences, penalties and composition of offences.
Who it applies to
- Employers in establishments of every size, across organised and unorganised sectors
- Employees whose wages, deductions and bonus are governed by the Code
- The Central Government and State Governments as the appropriate Government for fixing and revising minimum wages
- Inspector-cum-Facilitators and the authorities that decide claims under the Code
- Payroll, HR and compliance professionals advising on wage and bonus computation
Good to know
- Key chapters
- Chapter II (minimum wages, sections 5 to 14), Chapter III (payment of wages and deductions, sections 15 to 25) and Chapter IV (bonus, sections 26 to 41).
- Repeal
- Section 69 repeals the four earlier Acts the Code consolidates, subject to savings.
Frequently asked questions
Which section of the Code on Wages deals with the floor wage?
Section 9 empowers the Central Government to fix the floor wage.
Which section sets the time limit for paying wages?
Section 17.
Where are permitted deductions from wages listed?
Section 18, with specific deductions (fines, absence, damage, advances, loans) dealt with in sections 19 to 24.
Which chapter covers bonus?
Chapter IV, sections 26 to 41. Disqualification for bonus is in section 29 and the time limit for paying it in section 39.
Which section allows composition of offences under the Code?
Section 56.