The timely and full payment of wages is a foundational element of labour welfare and industrial justice. In India, wage protection has historically been governed by fragmented legislation, often leading to overlaps, inconsistencies and compliance challenges. The Code on Wages, 2019 (“Code”) represents a significant step towards consolidation and simplification of wage related laws, bringing uniformity in definitions, obligations and enforcement mechanisms. The provisions relating to payment of wages under the Code aim to ensure certainty in wage periods, prescribe clear timelines for disbursement, regulate permissible deductions and strengthen safeguards against arbitrary fines or delays. By modernising modes of payment and reinforcing accountability of employers, the Code seeks to balance ease of doing business with the fundamental right of workers to receive their lawful earnings without undue deprivation.

In what modes can wages be paid to an employee?

Wages shall be paid in any of the following modes:

(a)
current coin, or

(b)
currency notes, or

(c)
by cheque, or

(d)
by crediting the wages in the bank account of the employee, or

(e)
by electronic mode.

However, the appropriate Government may, by notification, specify certain industrial or other establishments where the employer shall pay wages only by cheque or by crediting the wages in the employee’s bank account.

How is the wage period for employees to be fixed?

The employer shall fix the wage period for employees as one of the following:

(a) daily, or

(b) weekly, or

(c) fortnightly, or

(d) monthly.

No wage period shall exceed one month for any employee. Different wage periods may be fixed for different establishments.

What are the time limits for payment of wages to employees?

The employer shall pay wages as follows:

(a)
to daily-rated employees, at the end of the shift;

(b)
to weekly-rated employees, on the last working day of the week, before the weekly holiday;

(c)
to fortnightly-rated employees, before the end of the second day after the end of the fortnight;

(d)
to monthly-rated employees, before the expiry of the seventh day of the succeeding month.

What is the time limit for payment of wages when employment comes to an end?

Where an employee has been removed or dismissed from service or retrenched, or has resigned from service, or became unemployed due to closure of the establishment, the wages payable shall be paid within two working days of such removal, dismissal, retrenchment, resignation, or closure.

Can the Government prescribe........

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