Act 29 of 2019 · in force 21 November 2025

Code on Wages, 2019

A floor under every wage.

Consolidates four wage statutes into one code covering minimum wages, payment of wages, bonus and equal remuneration for every employee in India — organised or not.

4 acts subsumedUniversal — no wage ceiling for minimum wages

Applies to

All employees employed by any industry, trade, business, manufacturing or occupation — including those previously excluded from minimum-wage schedules.

Watch the edge

Members of the Armed Forces of the Union. Apprentices under the Apprentices Act are treated separately for some wage-period rules.

What changed

National floor wage

Central Government fixes a floor wage. State minimum wages cannot fall below it. Different floors may be set for different geographical areas.

New definition of wages

Wages = basic + DA + retaining allowance. If exclusions (HRA, conveyance, bonus, overtime, commission) exceed 50% of total remuneration, the excess is added back into wages. This lifts the base for PF, gratuity and bonus.

Equal remuneration

No gender discrimination — including against transgender employees — in recruitment or pay for the same or similar work.

Timely payment

Wages must be paid on time in coin, currency, cheque, or electronic transfer. Daily, weekly, fortnightly and monthly wage periods are specified, with a hard outer limit of the 7th day of the succeeding month for monthly wages.

Section 1

Short title, extent and commencement

The Code extends to the whole of India. It came into force on 21 November 2025, replacing the Payment of Wages Act 1936, Minimum Wages Act 1948, Payment of Bonus Act 1965 and Equal Remuneration Act 1976.

For the employer

One wage code, one inspector-cum-facilitator, one set of registers — but the 50% wages definition changes cost.

Section 2(y)

Wages

Wages means all remuneration, whether by way of salary, allowances or otherwise, expressed in terms of money or capable of being so expressed. Specified exclusions apply (statutory bonus, value of house-accommodation, HRA, conveyance, overtime, commission, gratuity, retrenchment compensation) — but if those exclusions exceed one-half of all remuneration, the amount exceeding 50% is deemed wages.

For the employer

CTC structures that load allowances above 50% will be rewritten back into wages. Revisit offer letters and wage registers.

Section 5–6

Payment of minimum rate

No employer shall pay an employee wages less than the minimum rate notified. Where an employee does two or more classes of work, they are entitled to the minimum rate of the higher class for the time spent on it.

For the employer

Piece-rate, contract and gig-adjacent wage models still cannot undercut the notified minimum for employees.

Section 9

Floor wage

The Central Government shall fix a floor wage taking into account the minimum living standards of a worker. Different floor wages may be fixed for different geographical areas. The minimum wages fixed by the appropriate Government shall not be less than the floor wage.

For the employer

If a state rate sits below a newly notified floor, you must lift pay to the floor. Watch the Gazette.

Section 12–14

Overtime and hours for minimum-wage calculation

Where an employee works beyond the normal working day, overtime is paid at least twice the normal rate of wages. The appropriate Government may fix the number of hours that constitute a normal working day, including one or more specified intervals.

For the employer

Roster overtime carefully. 2× is the floor, not a target.

Section 17

Mode of payment

Wages shall be paid in current coin or currency notes or by cheque or by crediting the wages in the bank account of the employee, or by electronic mode. The appropriate Government may mandate a particular mode for a class of establishments.

For the employer

Electronic credit plus a wage slip is the clean compliance path.

Section 21

Deductions

Deductions from wages are permitted only on listed grounds (fines, absence, damage, house-accommodation, recovery of advances, income-tax, provident fund, cooperative societies, etc.). Total deductions generally cannot exceed 50% of wages.

For the employer

Fines require a notice and, in many cases, an opportunity of being heard. Keep the deduction register.

Section 26

Eligibility

An employee who has worked not less than 30 days in an accounting year is eligible for bonus, subject to wage-threshold notifications. The Code continues the statutory bonus scheme for establishments employing 20 or more persons.

For the employer

Threshold remains 20 employees. Allocable surplus and set-on/set-off rules continue in spirit.

Section 26–31

Minimum and maximum bonus

Every eligible employee is entitled to a minimum bonus of 8.33% of wages or ₹100, whichever is higher. Maximum bonus is 20% of wages earned in the accounting year.

For the employer

Budget 8.33–20% of wages as defined in s.2(y), not of a shrunken basic.

Section 51

Inspector-cum-facilitator

The inspector-cum-facilitator may advise employers and workers, inspect, examine records, and search or seize with the safeguards in the Code. Web-based inspection schemes may be notified.

For the employer

Expect randomised, web-assigned inspections rather than only physical raids — but records must still be real.

Section 54

Penalties for paying less than due

Paying an employee less than the amount due under the Code attracts a fine which may extend to ₹50,000. A subsequent offence may attract imprisonment up to three months, or fine up to ₹1,00,000, or both.

For the employer

A second conviction is a criminal exposure. Treat wage defaults as a board-level risk.

Definitions

Employee: Any person (other than an apprentice engaged under the Apprentices Act) employed on wages by an establishment to do any skilled, semi-skilled, unskilled, manual, operational, supervisory, managerial, administrative, technical or clerical work.
Employer: A person who employs, whether directly or through any person or on behalf of any person, one or more employees in an establishment, including the head of a department of the appropriate Government and occupier of a factory.
Floor wage: The wage fixed by the Central Government under section 9, below which no state minimum wage may be notified.

Penalties

Offence	First	Repeat
Paying less than the amount due under the Code	Fine up to ₹50,000	Imprisonment up to 3 months and/or fine up to ₹1,00,000
Non-maintenance or improper records / returns	Fine up to ₹10,000	Higher fine; continuing offence may attract a daily penalty
Unlawful deductions or delayed wages	Fine, plus direction to pay the amount due	Enhanced fine / imprisonment as notified for subsequent offences

Subsumed acts

Payment of Wages Act, 1936
Now read inside this code
Minimum Wages Act, 1948
Now read inside this code
Payment of Bonus Act, 1965
Now read inside this code
Equal Remuneration Act, 1976
Now read inside this code

Questions people actually ask

Does the floor wage replace my state’s minimum wage?

No. It is a floor. States still notify minimum wages, but they cannot go below the Centre’s floor. If a state rate is higher, the higher rate applies.

I am a gig worker. Is this my minimum wage?

The Wages Code covers employees. Gig and platform workers are primarily addressed in the Social Security Code. If you are in fact an employee (control, exclusivity, roster), the Wages Code may still apply — that is a facts-and-circumstances question.

What is the 50% wages rule in one sentence?

If exclusions from ‘wages’ (HRA, conveyance, overtime, bonus, commission, etc.) go over 50% of total pay, the excess is added back into wages for statutory calculations.

From the Gazette Library · 1 source document

Source: Code on Wages, 2019 (Act 29 of 2019), with commencement notification S.O. 5322(E) dated 21.11.2025 · ·

Repeals the Payment of Wages Act, 1936; the Minimum Wages Act, 1948; the Payment of Bonus Act, 1965; and the Equal Remuneration Act, 1976
In force from 21 November 2025: sections 1 to 41; section 42(4) to (9); sections 43 to 66; section 67(1), clauses (a) to (r) and (u) to (zc) of section 67(2), and section 67(3) to (5); section 68; section 69, except the provisions at serial number 3 of S.O. 4604(E) dated 18 December 2020
Extends to the whole of India
The Code on Wages, 2019 — Act No. 29 of 2019, assented to on 8 August 2019

Plain-language guide to the four labour codes, not a substitute for the Gazette, state rules, or advice from an advocate. Thresholds and schemes can still be notified or varied by the appropriate Government.