The Payment of Wages Act, 1936 and the Code on Wages, 2019 differ significantly in their scope, structure, and provisions. Here’s a detailed comparison:
Sr. no | Point of Difference | Payment Of Wages, 1936 | Code on wages, 2019 |
1 | Objectives | The Payment of Wages Act, 1936 was enacted with a view to ensuring that wages payable to employed persons covered by the Act were disbursed by the employers within the prescribed time limit and that no deductions other than those authorized by law were made by them. | The Code on Wages, 2019, aims to consolidate and simplify four existing labor laws: The Minimum Wages Act, 1948; the Payment of Wages Act, 1936; the Equal Remuneration Act, 1976; and the Payment of Bonus Act, 1965. Its goal is to streamline wage and payment regulations to enhance compliance and enforcement. |
2 | Scope and coverage
| Primary focus was on to ensure the wages received by the employees was on time. Its main aim was to cover employees working in factories, establishments, railway or any other establishment mentioned in sub-clauses (a) to (g) of clause (ii) of section 2 | Consolidates and simplifies the provisions of four central labour enactments: The Payment of Wages Act, 1936; the Minimum Wages Act, 1948; the Payment of Bonus Act, 1965; and the Equal Remuneration Act, 1976. Applies to all employees across various sectors, both organized and unorganized |
3 | Fixation of wage-periods | Every person responsible for the payment of wages under section 3 shall fix periods (in this Act referred to as wage-periods) in respect of which such wages shall be payable. No wage-period shall exceed one month | The employer shall fix the wage period for employees either as daily or weekly or fortnightly or monthly subject to the condition that no wage period in respect of any employee shall be more than a month: Provided that different wage periods may be fixed for different establishments. |
4 | Time of payment of wages | The wages of every person employed upon or in any railway, factory or [industrial or other establishment] upon or in which less than one thousand persons are employed, shall be paid before expiry of the seventh day and in any other case shall be paid before the expiry of the tenth day. | The employer shall pay or cause to be paid wages to the employees, engaged on— i) daily basis, at the end of the shift; (ii) weekly basis, on the last working day of the week, that is to say, before the weekly holiday; (iii) fortnightly basis, before the end of the second day after the end of the fortnight; (iv) monthly basis, before the expiry of the seventh day of the succeeding month. |
5 | Definition of Employer | “Employer” includes the legal representative of a deceased employer. | Employer includes: a) Occupier / manager in relation to a factory and b) in relation to any other establishment includes person who has control over the affairs of the est. if entrusted to Manager/MD, c) Contractor and d) legal representative of deceased employer |
6 | Responsibility of payment of wages | Every employer shall be responsible for the payment of all wages required to be paid under this Act to persons employed by him and in case of persons employed,— (a) in factories, if a person has been named as the manager of the factory under clause (f) of sub-section (1) of section 7 of the Factories Act, 1948; (b) in industrial or other establishments, if there is a person responsible to the employer for the supervision and control of the industrial or other establishments; (c) upon railways (other than in factories), if the employer is the railway administration and the railway administration has nominated a person in this behalf for the local area concerned; d) in the case of contractor, a person designated by such contractor who is directly under his charge; and (e) in any other case, a person designated by the employer as a person responsible for complying with the provisions of the Act, the person so named, the person responsible to the employer, the person so nominated or the person so designated, as the case may be, shall be responsible for such payment | Every employer shall pay all amounts required to be paid under this Code to every employee employed by him: Provided that where such employer fails to make such payment in accordance with this Code, then, the company or firm or association or any other person who is the proprietor of the establishment, in which the employee is employed, shall be responsible for such payment |
7 | Definition of employed person/worker | “Employed person” includes the legal representative of a deceased employed person | Worker does not include Apprentice engaged under Apprentices Act, 1961 but includes working journalists and sales promotion employees. Worker also does not includes a person employed in managerial or administrative capacity or in a supervisory capacity drawing wages exceeding fifteen thousand rupees per month or such other notified amount |
8 | Enforcement and Penalties – Increase in amount substantially and provision for imprisonment | Whoever being responsible for the payment of wages to an employed person contravenes specified provisions of Section 7,8,9,10 shall be punishable with fine which shall not be less than one thousand five hundred rupees but which may extend to seven thousand five hundred rupees]. Whoever contravenes specified provisions of Section 5,6,8,10,25 shall be punishable with fine which may extend to three thousand seven hundred fifty rupees | 1. Any employer who pays to any employee less than the amount due to such employee under the provisions of this Code shall be punishable with fine which may extend to fifty thousand rupees and thereafter found guilty of similar offence within 5 years of first shall be punishable with imprisonment for a term which may extend to three months or with fine which may extend to one lakh rupees, or with both 2) contravenes any other provision of this Code or any rule made or order made or issued there under shall be punishable with fine which may extend to twenty thousand rupees. If again found guilty of similar offence under this clause, within 5 years from the date of the commission of the first or subsequent offence, he shall, on the second and the subsequent commission of the offence under this clause, be punishable with imprisonment for a term which may extend to one month or with fine which may extend to Rs.40000/-, or with both. |
Similarities between the Payment of Wages Act, 1936 and the Code on Wages, 2019
The Payment of Wages Act, 1936 and the Code on Wages, 2019, have several similarities, as the latter amalgamates and builds upon the provisions of the former. Here are the key similarities:
Objective:
Both legislations aim to ensure that workers receive their wage in prescribed period of time
Coverage:
Its main aim was to cover employees working in factories, establishments, railway or any other establishment mentioned in sub-clauses (a) to (g) of clause (ii) of section 2. The Code on Wages, 2019, expands this coverage to all employees in both organized and unorganized sectors, thereby retaining the essence of providing wage protection but with broader applicability.
Timely Payment of Wages:
Ensuring the timely payment of wages is a common provision. While the Payment Of Wages Act specifies this for employees in scheduled employments, the Code on Wages extends this provision universally.
Enforcement Mechanisms:
The Payment of Wages Act provided for Inspectors to oversee compliance. The Code on Wages modernizes this role by introducing Inspectors-cum-Facilitators, who have additional responsibilities to provide information and facilitate compliance
Non-Discrimination:
Both laws prohibit discrimination in wage payment. The Code on Wages reinforces this by explicitly prohibiting discrimination in all matters relating to wages. These similarities illustrate the continuity and expansion of worker protections from the Payment of Wages Act, 1948, to the more comprehensive framework provided by the Code on Wages, 2019.
Conclusion
The comparison between the Payment of Wages Act, 1936 and the Code on Wages, 2019 highlights the significant shift from a sector-specific, limited framework to a comprehensive, universal wage law. While the core intent of ensuring timely and fair wage payment remains consistent, the Code on Wages expands the scope to all employees, strengthens enforcement, defines employer obligations more clearly, and introduces stricter penalties for violations.
The Code not only modernizes India’s wage legislation but also brings coherence, transparency, and uniformity in wage-related matters across industries. In doing so, it enhances worker protection and simplifies regulatory compliance for employers—marking a major step toward a unified and progressive labour law regime.
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