Section 1: Short title, extent and commencement

Overview

Section 1 of the Code on Wages, 2019, is foundational. It simply establishes the basic identity of the law – its name – and defines where it applies (its extent) and when it will become operational (its commencement). This section doesn’t deal directly with wage calculations, payment, or bonuses, but it’s crucial because it sets the stage for all the other provisions related to workers’ wages.

Scope and Coverage

• Which employees and establishments are covered: This Code applies to all employees across India. This includes workers in both the organized and unorganized sectors.
• Any thresholds or exclusions: There are currently no specific thresholds or exclusions mentioned in Section 1 regarding which establishments or employees are covered. The applicability is nationwide and generally inclusive, though specific exclusions might be detailed in later sections of the Code.

Key Obligations and Rights

• Main duties of employers: Employers don’t have direct obligations *under this specific section*. However, it signals that they will eventually need to comply with all the wage-related provisions of the Code once it’s officially implemented.
• Important rights or protections for employees: Employees gain the assurance that a unified law governing wages will eventually be in effect across the country, providing a consistent framework for their rights.

Compliance and Penalties

Section 1 itself doesn’t carry any penalties. It’s an introductory section. However, once the Code is notified and comes into force, employers will be subject to inspections and penalties if they violate the provisions related to wages, as outlined in other sections of the Code. The penalties will vary depending on the nature of the violation.

Practical Examples

• Example 1 from a typical workplace: A factory owner in Maharashtra knows that once the Code on Wages, 2019 is implemented, they must ensure all wage payments align with the new rules, even though they were previously following state-specific laws.
• Example 2 for a borderline scenario: A small shop owner in a rural area, previously exempt from certain wage regulations, needs to be aware that the Code on Wages, 2019, extends to the whole of India, meaning they may now be subject to the Code’s provisions.