Presently, there are around 40 state and central laws regulating different aspects of labour, such as resolution of industrial disputes, working conditions in factories, and wage and bonus payments.  Over the years, some experts have recommended that these laws should be consolidated for easier compliance.[1]  Since the current laws vary in their applicability, consolidation would also allow for greater coverage.

Following these recommendations, the Code on Wages was introduced in the Lok Sabha in August 2017.  The Code consolidates four laws related to minimum wages, payment of wages and bonus, and a law prohibiting discrimination between men and women during recruitment promotion and wage payment.

The Code was subsequently referred to the Standing Committee on Labour for examination.  The Committee has met some experts and stakeholders to hear their views.  In this context, we explain the current laws, key provisions of the Code, and some issues to consider.

Who will be entitled to minimum wages?

Currently, the Minimum Wages Act, 1948 lists the employments where employers are required to pay minimum wages to workers.  The Act applies to the organised sector as well as certain workers in the unorganised sector such as agricultural workers.  The centre and states may add more employments to this list and mandate that minimum wages be paid for those jobs as well.[2]  At present, there are more than 1700 employments notified by the central and state governments.[3]

The Code proposes to do away with the concept of bringing specific jobs under the Act, and mandates that minimum wages be paid for all types of employment – irrespective of whether they are in the organised or the unorganised sector.

The unorganised sector comprises 92% of the total workforce in the country.1  A large proportion of these workers are currently not covered by the Minimum Wages Act, 1948.  Experts have noted that over 90% of the workers in the unorganised sector do not have a written contract, which hampers the enforcement of various labour laws.[4]   

Will minimum wages be uniform across the country?

No, different states will set their respective minimum wages.  In addition, the Code introduces a national minimum wage which will be set by the central government.  This will act as a floor for state governments to set their respective minimum wages.  The central government may set different national minimum wages for different states or regions.  For example, the centre can set a national minimum wage of Rs 10,000 for Uttar Pradesh and Rs 12,000 for Tamil Nadu.  Both of these states would then have to set their minimum wages either equal to or more than the national minimum wage applicable in that state.

The manner in which the Code proposes to implement the national minimum wage is different from how it has been thought about in the past.  Earlier, experts had suggested that a single national minimum wage should be introduced for the entire country.1,[5]  This would help in bringing uniformity in minimum wages across states and industries.  In addition, it would ensure that workers receive a minimum income regardless of the region or sector in which they are employed.

The concept of setting a national minimum wage exists in various countries across the world.  For instance, in the United Kingdom one wage rate is set by the central government for the entire country.[6]  On the other hand, in the United States of America, the central government sets a single minimum wage and states are free to set a minimum wage equal to or above this floor.[7]

On what basis will the minimum wages be calculated and fixed?

Currently, the central government sets the minimum wage for certain employments, such as mines, railways or ports among others.  The state governments set the minimum wage for all other employments.  These minimum wages can be fixed based on the basis of different criteria such as type of industry or skill level of the worker.  For example, Kerala mandates that workers in oil mills be paid minimum wages at the rate of Rs 370 per day if they are unskilled, Rs 400 if they are semi-skilled and Rs 430 if they are skilled.[8]

The Code also specifies that the centre or states will fix minimum wages taking into account factors such as skills required and difficulty of work.  In addition, they will also consider price variations while determining the appropriate minimum wage.  This process of fixing minimum wages is similar to the current law.

Will workers be entitled to an overtime for working beyond regular hours?

Currently, the central or state government define the number of hours that constitute a normal working day.  In case an employee works beyond these hours, he is entitled to an overtime rate which is fixed by the government.  As of today, the central government has fixed the overtime rate at 1.5 times normal wages in agriculture and double the normal wages for other employments.[9]

The Code proposes to fix this overtime rate at twice the prevailing wage rate.  International organisations have recommended that overtime should be 1.25 times the regular wage.[10]

Does the Code prohibit gender discrimination between workers?

Currently, the Equal Remuneration Act, 1976 prohibits employers from discriminating in wage payments as well as recruitment of workers on the basis of gender.  The Code subsumes the 1976 Act, and contains specific provisions which prohibit gender discrimination in matters related to wages.  However, unlike in the 1976 Act, the Code does not explicitly prohibit gender discrimination at the stage of recruitment.

How is the Code going to be enforced?

The four Acts being subsumed under the Code specify that inspectors will be appointed to ensure that the laws are being enforced properly.  These inspectors may carry out surprise checks, examine persons, and require them to give information.

The Code introduces the concept of a ‘facilitator’ who will carry out inspections and also provide employers and workers with information on how to improve their compliance with the law.  Inspections will be carried out on the basis of a web-based inspection schedule that will be decided by the central or state government.

——————————————–

[1]. Report of the National Commission on Labour, Ministry of Labour and Employment, 2002, http://www.prsindia.org/uploads/media/1237548159/NLCII-report.pdf.

[2]. Entries 22, 23 and 24, List III, Seventh Schedule, Constitution of India.

[3]. Report on the Working of the Minimum Wages Act, 1948, Ministry of Labour and Employment, 2013, http://labourbureaunew.gov.in/UserContent/MW_2013_final_revised_web.pdf.

[4]. Report on Conditions of Work and Promotions of Livelihood in the Unorganised Sector, National Commission for Enterprises in the Unorganised Sector, 2007, http://nceuis.nic.in/Condition_of_workers_sep_2007.pdf.

[5]. Report of the Working Group on Labour Laws and other regulations for the Twelfth five-year plan, Ministry of Labour and Employment, 2011, http://planningcommission.gov.in/aboutus/committee/wrkgrp12/wg_labour_laws.pdf.

[6]. Section 1(3), National Minimum Wage Act, 1998, http://www.legislation.gov.uk/ukpga/1998/39/pdfs/ukpga_19980039_en.pdf.

[7]. Section 206(a)(1), The Fair Labour Standards Act, 1938, https://www.dol.gov/whd/regs/statutes/FairLaborStandAct.pdf.

[8]. G.O. (P) No.36/2017/LBR, Labour and Skills Department, Government of Kerala, 2017, https://kerala.gov.in/documents/10180/547ca516-c104-4b31-8ce7-f55c2de8b7ec.

[9]. Section 25(1), Minimum Wages (Central) Rules, 1950

[10]. C030-Hours of Work (Commerce and Offices) Convention (No. 30), 1930,http://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:12100:0::NO::P12100_INSTRUMENT_ID:312175.

On June 6, 2022, the Ministry of Electronics and Information Technology released the draft amendments to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (IT Rules, 2021) for public feedback.  The IT Rules were notified on February 25, 2021, under the Information Technology Act, 2000 (IT Act).  The Ministry noted that there is a need to amend the Rules to keep up with the challenges and gaps emerging in an expanding digital ecosystem.  In this blog post, we give a brief background to the IT Rules, 2021 and explain the key proposed changes to the Rules.

Background to the IT Rules, 2021

The IT Act exempts intermediaries from liability for user-generated content on their platform provided they meet certain due diligence requirements.  Intermediaries are entities that store or transmit data on behalf of other persons and include telecom and internet service providers, online marketplaces, search engines, and social media sites.  IT Rules specify the due diligence requirements for the intermediaries.  These include: (i) informing users about rules and regulations, privacy policy, and terms and conditions for usage of its services, including types of content which are prohibited, (ii) expeditiously taking down content upon an order from the government or courts, (iii) providing a grievance redressal mechanism to resolve complaints from users about violation of Rules, and (iv) enabling identification of the first originator of the information on its platform under certain conditions.  It also specifies a framework for content regulation of online publishers of news and current affairs and curated audio-visual content.  For an analysis of the IT Rules 2021 please see here.

Key changes proposed to the IT Rules 2021

Key changes proposed by the draft amendments are as follows:

  • Obligations of intermediaries:  The 2021 Rules require the intermediary to “publish” rules and regulations, privacy policy and user agreement for access or usage of its services.   The Rules specify restrictions on the types of content that users are allowed to create, upload, or share.  The Rules require intermediaries to “inform” users about these restrictions.  Proposed amendments seek to expand the obligation on intermediaries to include: (i) “ensuring compliance” with rules and regulations, privacy policy, and user agreement, and (ii) "causing users to not" create, upload, or share prohibited content.
     
  • The proposed amendments also add that intermediaries should take all reasonable measures to ensure accessibility of their services to all users, with a reasonable expectation of due diligence, privacy, and transparency.   Further, intermediaries should respect the constitutional rights of all users.  The Ministry observed that such a change was necessary as several intermediaries have acted in violation of the constitutional rights of citizens.
     
  • Appeal mechanism against decisions of grievance officers:  The 2021 Rules require intermediaries to designate a grievance officer to address complaints regarding violations of the Rules.  The Ministry observed that there have been instances where these officers do not address the grievances satisfactorily or fairly.  A person aggrieved with the decision of the grievance officer needs to approach courts to seek redressal.  Hence, the draft amendments propose an alternative mechanism for such appeals.  A Grievance Appellate Committee will be formed by the central government to hear appeals against the decisions of grievance officers.  The Committee will consist of a chairperson and other members appointed by the central government through a notification.  The Committee is required to dispose of such appeals within 30 days from the date of receipt.  The concerned intermediary must comply with the order passed by the Committee.  Note that the proposed amendments do not restrict users from directly approaching courts.
  • Expeditious removal of prohibited content:  The 2021 Rules require intermediaries to acknowledge complaints regarding violation of Rules within 24 hours, and dispose of complaints within 15 days.  The proposed amendments add that the complaints concerning the removal of prohibited content must be addressed within 72 hours.  The Ministry observed that given the potential for virality of content over internet, a stricter timeline will help in removing prohibited content expeditiously.

Comments on the draft amendments are invited until July 6, 2022.