What does the Code on Wages, 2019 require?
The Code on Wages, 2019 combines four laws on pay: the Payment of Wages Act, the Minimum Wages Act, the Payment of Bonus Act and the Equal Remuneration Act. It sets who must be paid minimum wages, when wages are due, what can be deducted, and how bonus works. It has applied since 21 November 2025.
At a glance
- Minimum wages apply to all employees, in organised and unorganised work (PIB).
- Wages are due on fixed dates by wage period; on exit, within two working days.
- Deductions are limited to those the Code allows, and total deductions cannot exceed 50% of wages in a wage period (Ministry handbook).
- No gender discrimination in pay for the same or similar work, or in recruitment.
Minimum wage and floor wage
Employers must pay at least the minimum wage fixed by the appropriate government. The Central Government fixes a floor wage, based on minimum living standards and possibly varying by area, and no minimum wage may be set below it. See minimum wage and floor wage.
When wages must be paid (section 17)
| Wage period | Pay date |
|---|---|
| Daily | At the end of the shift |
| Weekly | On the last working day of the week, before the weekly holiday |
| Fortnightly | Before the end of the second day after the fortnight |
| Monthly | Before the expiry of the seventh day of the next month |
If an employee is dismissed, retrenched or resigns, wages payable must be paid within two working days. The appropriate government may set a different period where it considers it reasonable. See full and final settlement.
Deductions
The Code allows only listed deductions: for absence, for damage or loss, to recover advances or loans, for fines imposed after a hearing, and for housing or amenities accepted by the employee. Together they cannot exceed 50% of the wages in a wage period.
Overtime, records and wage slips
- Overtime is paid at no less than twice the normal rate for employees whose minimum rate of wages is fixed under the Code.
- Attendance, wage, overtime and deduction registers can be kept on paper or electronically and are preserved for five years.
- A wage slip must be issued on or before payment.
Bonus under the Code on Wages, 2019
Section 26 gives annual bonus to employees who earn up to the amount the government notifies and who worked at least 30 days in the accounting year. The Ministry's handbook states the range as a minimum of 8.33% and a maximum of 20% of wages earned. The salary cut-off is set by notification, so check the current figure.
What the Code counts as wages
The Code uses one definition of wages, discussed in the new wage definition. It matters for bonus, overtime, and, through the other codes, for PF and gratuity.
Sources
- The Code on Wages, 2019 (official text), https://www.labour.gov.in/static/uploads/2025/06/c328da14bbb15fc4ad571dc33e7a4ab3.pdf, checked 2026-10-31
- Ministry of Labour and Employment, Compliance Handbook for Employers under the Four Labour Codes (Central Government sphere), https://www.labour.gov.in/static/uploads/2026/02/83978455025732b99b0165def80ab171.pdf, checked 2026-10-31
- PIB, India's Labour Reforms: Simplification, Security, and Sustainable Growth (21 Nov 2025), https://www.pib.gov.in/PressReleasePage.aspx?PRID=2192524®=3&lang=2, checked 2026-10-31
- Ministry of Labour and Employment, FAQs on Labour Codes (Dec 2025), https://www.labour.gov.in/static/uploads/2026/01/de4758d5bfeffc456d7de97a801891b0.pdf, checked 2026-10-31
This is general information, not legal, tax or immigration advice. Rules change and your situation may differ. Consult a licensed attorney or qualified adviser.