LEGAL IMPLICATIONS OF NEW WAGE CODE: A CRITICAL ANALYSIS

The Indian government is utilizing wage policy as part of broader monetary policy measures to safeguard the income of migrant and informal labourers affected by the Covid-19 epidemic and the lockdown that follows. In the past 20 years, during the period of economic liberalization, the pervasive discussion over Indian labor regulations impeding the flexibility of the labor market has taken center stage. In the twenty years after the economic liberalization phase, the persistent debate over how Indian labor regulations restrict labor market flexibility has gained significant attention. One of the major turning points in labor law reform over the last three decades has been the introduction of new labor codes by the Indian government, which aim to simplify and streamline labor rules to create a more business-friendly environment. On the other hand, labor unions vehemently contend that, in spite of what they see as "restrictive" labor regulations, the Indian labor market is still "flexible" to the advantage of employers and that any further deterioration of the present framework of labor laws would have a detrimental effect on the working class. As part of a recent effort to overhaul wage policy, the Indian government passed the Code on Wages in August 2019. A mandatory floor pay and extending the legal minimum wage coverage to all wage workers are among the reform measures, which also aim to streamline the country's minimum wage framework. In July 2020, the government released the draft law on Wages (Central) Rules, which described how the wage laws would be implemented. This paper examines how the policy of minimum wages could be reinstated as a mechanism for redistribute targeted at low-paid workers as a result of some of the significant changes made to the pay law. Employee welfare depends on a minimum wage policy that is effective and addresses the extent of legal coverage, the floor and minimum wage levels, and compliance. Consequently, the paper examines the proposed implementation strategy for these three variables in the draft pay regulations, identifies its shortcomings, and makes recommendations for improvements.