The Code combines the provision of the following four laws: (i) the Payment of Wages Act, 1936, (ii) the Minimum Wages Act, 1948, (iii) the Payment of Bonus Act, 1965, and (iv) the Equal Remuneration Act, 1976. The Wage Code regulates wage and bonus payments in all employment. The Code on Wages Bill, 2019 was passed by the Lok Sabha on Jand Rajya Sabha on 02 August 2019. Where a worker works in excess of a normal working day, he is entitled to overtime wage, which must be at least 200% of the normal wage rate. In line with the Wage Code, the central or state government may fix the number of working hours that constitute a normal working day. Any proposed change should be notified to the Inspector, before the change is made. Period of work, fixed in accordance with the provisions of Act, should be properly notified and displayed in the factory. The Chief Inspector is authorized to extend this spread over, for reasons specified in writing, to 12 hours.Īn employee may not be required to work overtime on short notice without prior intimation. This means that an overtime of 2 hours is allowed per day. The total spread over (of working hours) inclusive of rest breaks and overtime cannot exceed ten and a half hours in any day. A worker must get a rest interval of at least half an hour (30 minutes) after at most five hours of work. The periods of work must be fixed in such a way that no period should exceed five hours (exemption can be granted to extend this period to 6 hours).
The ordinary rate of wages includes the basic wages plus such allowances, including the cash equivalent of the advantage accruing through the concessional sale to workers of food grains and other articles, as the worker is for the time being entitled to, but does not include a bonus and wages for overtime work. The compensation for overtime work is twice the regular rate of his ordinary pay (200% of the regular wage rate). Working hours for young workers are 4.5 hours per day.Īdult workers may be required to work beyond the stipulated working hours, i.e., 9 hours a day and 48 hours a week. In accordance with the Factories Act 1948, normal working hours are 9 hours per day and 48 hours per week. The new legal provisions will be effective only, once notified. The Central and State Governments have yet to notify the rules. The Four new Labour Codes were supposed to be effective from 01 April 2021 however considering the rise in COVID cases and the potential impact of the new Codes on per employee costs for enterprises, the Government has delayed implementation of new Codes to a future date. The Code on Wages, enacted in 2019, also amalgamated four relevant labour laws.
Last year (2020), the Indian Parliament combined 25 labour laws into three codes, i.e., the Social Security Code, the Code on Industrial Relations and the Code on Occupational Safety, Health and Working Conditions. Overtime Compensation Note: Upcoming Labour Legislation in India
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