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New Labour Code: White-collar employees to receive overtime pay

Labour Code, 2019, will merge three central labour acts, The Trade Unions Act, 1926, The Industrial Employment (Standing Orders) Act, 1946 and The Industrial Disputes Act, 1947.

December 11, 2020 / 02:31 PM IST

Professionals who put in extra hours at work would be eligible for overtime once the Code on Wages, 2019, comes into force. The Code widens the purview of overtime pay to include all employees, including managerial staff.

The code states that the compensation for overtime should be at least twice that of the employees' regular pay, the Economic Times reported. At present, the white-collar workers are not in the purview of overtime wage payment.

The Code on Wages also has provisions for minimum and timely payment of wages to all the workers in India. It consolidates four laws relating to wages and bonus, namely - Payment of Wages Act, 1936, Minimum Wages Act, 1948, Payment of Bonus Act, 1965 and Equal Remuneration Act, 1976.

Explained: The Four Labour Codes And What They Mean For India's Workforce

It introduces the concept of floor wages wherein the rates will be fixed by the central government by taking into account the minimum living standards of the workers. Once the code is enacted, the minimum rates of wages fixed by the State Government cannot be less than floor wages as determined by the Central Government.


The government introduced the code in a bid to streamline and simplify the country's existing and overlapping labour laws.

Labour Minister Santosh Gangwar, in September, said that the government plans to implement four labour codes in one go by December. Gangwar had said, "Government is doing all efforts to complete the labour reforms by implementing all four labour codes by December this year…"

The Parliament passed The Industrial Relations Code, 2020, the Code on Social Security, 2020 and the Occupational Safety, Health and Working Conditions Code, 2020 during the Monsoon Session. It passed the Code on Wages in 2019. Together, these four codes merged 44 pre-existing labour laws.

Explained: New Labour Code May Make The Employer Happier Than The Employees
Moneycontrol News
first published: Dec 8, 2020 10:36 am
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