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Labour Laws Central Ministry of Labour and Employment Code on Wages, 2019

FAQs on Wage Definition, 50% Wage Threshold, Overtime Eligibility, and Gratuity Calculation under the Code on Wages, 2019

16-Mar-2026 | NA

This FAQ clarifies the scope and applicability of provisions under the Code on Wages, 2019. Ensure that overtime payments are included while calculating the 50% wage threshold and that only specified statutory components such as employer contributions to PF/pension and statutory bonus are considered for inclusion in remuneration, while excluding gratuity, ESI, and other retirement benefits. Further, ensure that minimum wages and wages are treated distinctly, with strict adherence to payment of at least the notified minimum wages. Annual performance-based incentives should not be included in the computation of wages. Also, ensure that all eligible employees, including workers whose minimum wages are fixed, are paid overtime wages as applicable. Additionally, ensure that the revised definition of wages is applied for gratuity calculation from the effective date of enforcement, and that wage structuring complies with the prescribed limits and inclusions as clarified in the FAQs.

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