Compliance Requirements for the Minimum Wages under the Code on Wages (Gujarat) Rules, 2021

Background

The Code on Wages, 2019 was enacted to consolidate and rationalize India’s wage-related labour laws by subsuming the Payment of Wages Act, Minimum Wages Act, Payment of Bonus Act and Equal Remuneration Act into a single unified framework, with the objective of ensuring uniform wage standards, timely payment of wages and elimination of wage discrimination. In line with the central legislation, the Government of Gujarat notified the Code on Wages (Gujarat) Rules, 2021, which lay down the procedural and administrative mechanisms for implementing the Code within the state, replacing earlier wage-related rules and streamlining employer compliance.

Applicability

Establishment covered under Code on Wages (Gujarat) Rules 2021

Compliance Requirements under the Rules in Accordance with the Code

1. Prohibition of discrimination on ground of gender in recruitment and payment of wages in Gujarat (Section 3)

  1. Discrimination based on gender in payment of wages or recruitment of employees within an establishment is prohibited in respect of same work or work of a similar nature.

  2. Employees must receive equal pay for the same work regardless of gender, and wages cannot be reduced based on gender.

  • This provision is not applicable where the employment of women in such work is prohibited or restricted by or under any law for the time being in force.

  • 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

  • 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

2. Payment of Minimum Wages in Gujarat (Section 5, 7, Rule 3)

No employer shall pay to any employee wages less than the minimum rate of wages notified by the State Government.

  1. Part-day work: Employee engaged for less than normal daily hours is entitled to full day wages, unless the shortfall is due to his unwillingness or prescribed exceptions.

  2. Multiple classes of work: If different minimum rates apply, employee must be paid at not less than the applicable rate for each class based on time spent.

  3. Piece-rate work: Where only a minimum time rate is fixed, wages must not be less than that minimum time rate, regardless of output.

  4. Overtime work: Any hours worked beyond normal daily hours must be compensated at the overtime rate, not less than twice the ordinary wage rate.

  5. Safeguard: Provision ensures fair pay for part-day work, multi-tasking, piece-rate assignments, and overtime, protecting employees from underpayment.

 

3. Payment of wages to employee who works for less than normal working day in Gujarat (Section 10)

Employee whose minimum rate of wages has been fixed under this Code by the day works on any day on which he was employed for a period of less than the requisite number of hours constituting a normal working day, he shall be entitled to receive wages in respect of work done on that day.

Exception to Section 10: Employee shall not be entitled to receive wages for a full normal working day:

(i) in any case where his failure to work is caused by his unwillingness to work and not by the omission of the employer to provide him with work;

(ii) in such other cases and circumstances, as may be prescribed.

4. Payment of wages to employee involved in two or more classes of work in Gujarat (\Section 11)

Where an employee does two or more classes of work to each of which a different minimum rate of wages is applicable, the employer shall pay to such employee in respect of the time respectively occupied in each such class of work, wages at not less than the minimum rate in force in respect of each such class.

5. Payment of minimum wages as per time rate to employee involved in piece work in Gujarat (Section 12)

Where a person is employed on piece work for which minimum time rate and not a minimum piece rate has been fixed under this Code, the employer shall pay to such person wages at not less than the minimum time rate.

6. Payment of wages for overtime work at twice the normal rate of wages in Gujarat (Section 14, Rule 10)

Where an employee whose minimum rate of wages has been fixed under this Code by the hour, by the day or by such a longer wage-period as may be prescribed, works on any day in excess of the number of hours constituting a normal working day, the employer shall pay him for every hour or for part of an hour so worked in excess, at the overtime rate which shall not be less than twice the normal rate of wages.

7. Hours of work for normal working day in Gujarat (Code on Wages (Gujarat) Rules, 2021 – Section 13, Rule 6, 9)

A normal working day consists of eight hours of work and one or more intervals of rest which in total shall not exceed one hour and total time, including work and breaks, should not exceed twelve hours in a single day.

  1. Nothing in this rule shall be deemed to affect the provisions of the Factories Act, 1948 or as the case may be the Code on Occupation, Safety and Health and the Gujarat Shops and Establishment Act, 2019

  2. The provisions in case of agricultural employment, be subject to such modifications as determined by State Government.

  3. The provisions will apply subject to the condition that in case of specified class of employees as given in section 13(2), the actual hours of work excluding the intervals of rest and the periods of inaction during which the employee may be on duty but is not called upon to display either physical activity or sustained attendance shall not exceed 9 hours in any day and the spread over of the hours of work of the employee shall not exceed 16 hours in any day.

8. Number of rest day in a week in Gujarat (Code on Wages (Gujarat) Rules, 2021 – Section 13, Rule 7, 9)

Every employee shall get a day of rest every week which should ordinarily be Sunday or any other day as fixed by employer. If employees work on a rest day, they shall be paid at the overtime rate.

  1. An employee shall be entitled to rest day only if he has worked under the same employer for a continuous period of not less than six days.

  2. The employee shall be informed of the day fixed as the rest day and of any subsequent change in the rest day before the change is effected, by display of a notice to that effect in the place of employment at the place specified by the Inspector-cum-Facilitator in this behalf.

  3. The provisions will apply subject to the condition that in case of specified class of employees as given in section 13(2), the actual hours of work excluding the intervals of rest and the periods of inaction during which the employee may be on duty but is not called upon to display either physical activity or sustained attendance shall not exceed 9 hours in any day and the spread over of the hours of work of the employee shall not exceed 16 hours in any day.

9. Substituted rest day in Gujarat (Code on Wages (Gujarat) Rules, 2021 – Rule 7(2),(3))

Any employee shall not be required or allowed to work on the rest day unless he has or will have a substituted rest day for a whole day on one of the five days immediately before or after the rest day.

  1. However no substitution shall be made which will result in the employee working for more than ten days consecutively without a rest day for a whole day

  2. Where in accordance with the foregoing provisions of this rule, any employee works on a rest day and has been given a substituted rest day on any one of the five days before or after the rest day, the rest day shall, for the purpose of calculating the weekly hours of work, be included in the week in which the substituted rest day occurs.

10. Payment of wages for rest day in Gujarat (Code on Wages (Gujarat) Rules, 2021 – Rule 7(4))

An employee shall be granted-

  • for rest day wages @ applicable to next preceding day

  • where he works on rest day & has been given substituted rest day, he shall be paid wages for rest day on which he worked at overtime rate & wages for substituted rest day at rate applicable to next preceding day

Where-

(i) minimum rate of wages of the employee as notified under the Code has been worked out by dividing the minimum monthly rate of wages by twenty- six; or

(ii) the actual daily rate of wages of the employee has been worked out by dividing the monthly rate of wages by twenty-six and such actual daily rate of wages is not less than the notified minimum daily rate of wages of the employee,

then, no wages for the rest day shall be payable; and

(iii) the employee works on the rest day and has been given a substituted rest day, then, he shall be paid, only for the rest day on which he worked, an amount equal to the wages payable to him at the overtime rate

Penalty & Punishment

U/s 54: Contravenes any other provision of this Code or any rule made or order made or issued thereunder shall be punishable with fine which may extend to Rs.20000.

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.

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