As per Section 17(2) of the Code on Wages, the wages shall be paid within two working days. When an employee has been removed, dismissed, retrenched, resigned from service, or became unemployed due to the closure of the establishment, the wages payable to him shall be paid within two working days of his removal, dismissal, retrenchment or, as the case may be, his resignation. Similarly, Leave Encashment shall be paid under the Occupational Safety, Health & Working Conditions, 2020, within 2 days of such termination. However, the term, Full and Final Settlement, normally includes other elements, for example, Gratuity. And for Gratuity, the Code on Social Security, 2020 and draft central Rules thereunder provide 30 days. Therefore, it is not the entire component of the Full and Final Settlement that needs to be settled in 2 days.

The new “wage” definition is certainly complex, with inclusions and certain exclusions with a cap on exclusions @ 50% of the total remuneration. Therefore, in a situation where the only component included is Basic, and is less than 50% of the remuneration, the proviso of the definition would ensure that the “wage” is 50% of the remuneration. For all practical purposes like calculating contributions for PF/ESIC, the calculation for gratuity etc, the “wage” will be 50% of the Remuneration, even if the Basic is less than 50%. However, if the Basic is more than 50% of remuneration, then the wage for such calculation would be the actual Basic.

As per the OSH Code, a contractor who has an establishment in more than one State and is desirous of obtaining a license for supplying or engaging contract labour or undertaking or executing the contract work in more than one State or for pan-India makes provision for “National License” for a contractor but this is subject to requisite qualifications or criteria to be fulfilled by the Contractor as may be prescribed by the Central Government.

While the OSH Code applies to all establishments having 10 or more employee therein, the specific chapters thereunder would apply based on the subject matter it governs. The Contract Labour chapter will only apply to establishments or contractors employing 50 or more contract workers. And the Factories chapter would apply to factories (without the aid of power) employing 40 or more workers and if they are running with aid of power, then 20 or more workers therein. Such factories would also require a licence in the same manner as required currently under Factories Act. But factories having less than 20 employees (but more than 10 employees) will have to comply with the registration requirement under the OSH Code.