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ARTICLE · 02 DECEMBER 2025

Code On Wages, 2019

Anhad Law
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The definition of wages is to be considered for calculation of minimum wages, provident fund ("PF") contributions, Employee State Insurance ("ESI"), maternity benefit, employee's compensation, gratuity, statutory bonus, and other payment of wage related provisions.

IndiaEmployment and HR
Anhad Law
Anhad Law
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As a latest update, the Government of India has officially notified today the Code on Wages, 2019 ("Wage Code") vide Notification bearing No. F. No. S-32022/1/2025-WC in a phased manner, consolidating and repealing key central labour laws – Payment of Wages Act, 1936, Payment of Bonus Act, 1965, Minimum Wages Act, 1948 and Equal Remuneration Act, 1976 .

Key Features at a Glance

  • The Wage Code introduces a uniform definition of "wages". The new definition includes three components – basic pay, dearness allowance and retaining allowance, while excluding special components like house-rent allowance, travel allowance, overtime, gratuity, commission, rewards, bonuses and employer contribution to retirement benefits. All the exclusions are subject to a 50% ceiling beyond which the exceeding amount is considered under the definition of "wages".

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