The new Labour Code proposes a uniform framework for salary payments and employee settlements across sectors. Under the proposed provisions, employers will be required to pay monthly salaries by the 7th of the following month, while employees leaving an organisation through resignation, termination or dismissal will be entitled to receive their full and final settlement within two working days. The measures are aimed at bringing greater clarity and consistency to wage administration.
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Uniform Wage Rules for All Employees
Unlike the earlier Payment of Wages Act, 1936, which applied only to employees within a specified wage limit, the new Labour Code extends these provisions to all employees, including senior management and high-income earners. Daily wage workers will be paid at the end of each shift, weekly wage earners before their weekly holiday, and fortnightly employees within two days of the end of the wage period.
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New Mechanism for Wage Disputes
The code introduces the role of an Inspector cum Facilitator to address complaints related to delayed salary payments or unauthorised deductions. Employees can approach this authority for resolution, and unresolved cases may be referred to the Industrial Tribunal. The proposed framework also prescribes limits on wage deductions and requires employers to provide either a physical or electronic payslip with salary payments.
Longer Claim Period and Time Bound Resolution
The proposed rules extend the time available for employees to claim unpaid wages to three years, replacing the shorter limitation period under the previous law. Wage claims are expected to be decided within three months. If an employer fails to comply with a payment order, the outstanding amount may be recovered through the district administration as arrears of land revenue. Once implemented, these provisions are expected to strengthen wage compliance and provide employees with a more structured mechanism for protecting their rights.
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