Why is it necessary to fix a minimum wage?
On August 8, the President gave his assent to the Code on Wages, 2019, that had earlier been approved by Parliament.
The Code, which replaces four laws
• The Payment of Wages Act, 1936.
• The Minimum Wages Act, 1948.
• The Payment of Bonus Act, 1965.
• The Equal Remuneration Act, 1976.
It seeks to regulate wages and bonuses for all workers employed by any industry, trade, business or manufacturer.
Why is the Code significant?
- Minimum wages are accepted globally to be a vital means to both combating poverty and, equally crucially, ensuring the vibrancy of any economy.
- In the aftermath of the 2008 global financial crisis and the erosion of purchasing power worldwide, the International Labour Conference’s Global Jobs Pact of 2009 identified “the regular adjustment of wages, in consultation with the social partners” as a means of reducing inequality, increasing demand and contributing to economic stability.
- Setting the floor wage is to ensure “minimum living standards” for workers and the draft rules incorporate criteria declared in a landmark judgment of the Supreme Court in 1992 as well as recommendations of the 15th Indian Labour Conference.
- These include the net calorific needs for a working class family (defined as the earning worker, spouse and two children or the equivalent of three adult consumption units) set at 2,700 calories per day per consumption unit, their annual clothing requirements at 66 metres per family, house rent expenses assumed at 10% of food and clothing expenditure, as well as expenses on children’s education, medical needs, recreation and contingencies.
- In the field of law, an enactment/a statute/a bill/a regulation which has passed through several legislative steps needed for it and which has become law is called an ACT.
- At the meantime, a specific type of action made by legislature that tries to cover a complete system of laws is called a CODE. It is enacted by a process of codification.
- Act= Decision made passed into law Code= Collection of acts already passed into law