Overview
Applicability
Key Compliance Areas
Minimum wages
Employers must ensure that employees are paid not less than the applicable statutory minimum wage prescribed for the relevant employment, skill category and applicable area.
Definition and calculation of wages
Employers must correctly determine the statutory definition of wages and identify the wage components to be included or excluded for applicable statutory calculations.
Timely payment of wages
Employers must ensure that wages are paid to employees within the prescribed statutory time limits and maintain appropriate records of wage payments.
Permissible deductions
Only deductions authorised under the Code may be made from wages. Employers should ensure that deductions remain within the prescribed limits and are properly documented.
Equal remuneration and non-discrimination in wages
Employers must maintain non-discriminatory wage practices and ensure that employees are not subjected to prohibited discrimination in matters relating to wages and remuneration.
Wage slips
Employers must issue wage slips containing the prescribed particulars relating to wages, overtime, deductions and net wages, within the applicable statutory timeline.
Employment and payroll records
Proper employee and payroll records should be maintained, including employee particulars, designation, employment category, date of joining, wage details and other prescribed information.
Registers, returns and inspection requirements
Employers should maintain prescribed registers, records, wage documents and statutory returns and make them available to the competent authorities whenever required.
Floor wage framework
The Code provides for a floor wage framework. Applicable minimum wages are required to be considered in accordance with the statutory floor wage prescribed under the Code.
Basic wage and wage components
Salary structures should clearly identify Basic wages, Dearness Allowance and other applicable components and should be structured in accordance with the applicable legal requirements.
Overtime wages
Employees who work beyond the prescribed working hours must be paid overtime wages at the applicable statutory rate. Overtime hours and payments should be properly recorded.
Restrictions relating to deductions and fines
Fines and deductions must be imposed only in accordance with the prescribed legal conditions and procedures. Employers should maintain proper records and provide the required opportunity to the employee where applicable.
Statutory bonus
Eligible employees must receive statutory bonus in accordance with the applicable provisions of the Code. Employers should properly assess eligibility, calculate the bonus and ensure timely payment.
Wage and attendance records
Employers should maintain accurate records of attendance, days worked, wages, overtime, deductions, fines and wage payments for statutory compliance and verification.
Claims and recovery of wage dues
Employees may seek statutory remedies for underpayment of wages, unpaid overtime, unlawful deductions, unpaid bonus and other wage-related dues. Employers should maintain adequate records to address and respond to such claims.
The Code on Wages rules prescribe wage slips and registers covering wages, overtime, fines and deductions.
Why Compliance Matters
Employers should ensure that their wage structure, payroll practices, minimum wages, overtime payments, deductions, bonus calculations and statutory records properly follow the Code on Wages and the applicable rules.
