The Problem With a Universal Definition of Wages

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Introduction The Code on Wages has been brought in as a part of the Government’s efforts to untangle India’s complex regulatory framework pertaining to labour. As part of the Code, the Government has introduced a new definition of the term ‘wages’ that is uniform across the four Labour Codes. The uniform definition comprises three parts – an inclusive portion, specified exclusions and conditions that place a limit on the quantum that may be claimed as…

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‘Wages’ Under Payment of Wages Act & Code on Wages: A Comparative Analysis

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Introduction The Code on Wages, 2019 has been passed by the Parliament and with the draft Central rules awaiting Parliament’s approval, India’s biggest overhaul of labour laws is imminent. The Code on Wages, 2019 subsumes four labour legislations, namely:- 1.  The Payment of Wages Act, 1936 2.  The Minimum Wages Act, 1948 3.  The Payment of Bonus Act, 1965 4.  The Equal Remuneration Act, 1976 Several changes were brought in through the Code to facilitate…

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Burdensome Procedural Norms Under Payment of Gratuity Act, 1972

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An Overview of Procedural Norms The Payment of Gratuity Act, 1972 read with the Payment of Gratuity (Central) Rules, 1972 provides for a complex procedure when it comes to application for and processing of gratuity payments. Procedural norms under Section-4 of the Act stipulate that gratuity shall be paid to an employee on the termination of his employment after he has rendered continuous service for not less than five years. Section 2A of the Act…

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Proposed Reforms to the Payment of Gratuity Act, 1972

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Introduction The roots of the term gratuity can be traced to the French word gratuité or from the Latin term gratuitus, both the terms loosely mean the voluntary payment of money for favour or services. At its most basic level, payment of gratuity is a sum tendered to employees following longevity of service and is generally paid towards their retirement fund. In foreign countries it is also used synonymously with tipping, however, in India it…

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Industrial Policy Shifts Across India: An Analytical Study

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What is an Industrial Policy? An industrial policy is a document that outlines a country’s or state’s strategy in guiding economic development by encouraging investment in targeted sectors, providing subsidies to industrialists and incentivizing participation of the private sector. To this end, it lays down the legal reforms that are going to be implemented to facilitate the same as well as the guiding principles for further structural reform. It also provides plans for infrastructural development…

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Implications of the ESIC Proposal to Increase the Wage Threshold

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Introduction The Employees’ State Insurance Corporation (ESIC) is a statutory body responsible for administering India’s flagship social insurance program. It is established under the Employees’ State Insurance Act, 1948 which empowers it to make rules with respect to the scheme under Section-95 of the Act. Rule-50 of the Employees’ State Insurance (Central) Rules provides for the wage threshold for coverage of an employee under the Act, and consequently the scheme. It was previously amended in…

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Update on Eligibility Criteria and Increase of Unemployment Benefit Under ABVKY

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In an earlier blog post titled Unemployment Benefits under ESI: RGSKY and ABVKY we had discussed the eligibility criteria as well as the manner in which unemployment benefits can be claimed under the two ESIC schemes. In this post we shall examine the changes brought in by the ESIC through its Press Release No. E-13/12/9/2020-P.R. dated 20th August 2020. The Employees’ State Insurance Corporation during its 182nd meeting decided to take steps to provide workers…

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A Critical Analysis of PF Withdrawal Rules

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The Employee Provident Fund is a scheme established under the Employees’ Provident Funds and Miscellaneous Provisions Act of 1952. It operates based on a mutual contribution by the employer and the employee towards a corpus that acts as a retirement fund of sorts. Social security as welfare for the elderly is based on a conception of social security programs as a solution to market failure. The argument is that the market fails to address the…

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Code on Wages: Changes in Compliance and Expected Impact

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Introduction The Code on Wages, 2019 was passed by both Houses of Parliament last year. However, its draft Rules were circulated to receive recommendations and objections from the public on July 10th, 2020. From a technical perspective, the Code on Wages is already a law, but it has not been brought into force through a notification in the Official Gazette as per Section-1(3) of the Code. This article examines the Code on Wages, 2019 read…

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