Sl. No.

Act Name

Section No.

Rule No.

Compliance

Due Date / Frequency

Penalty

Risk

1

Code on Wages, 2019

Section 5

—

Pay every employee wages not lower than the minimum rate notified by the appropriate Government.

Every wage payment

Section 54(1)(a): Fine up to ₹50,000. Repeat similar offence within 5 years: imprisonment up to 3 months, or fine up to ₹1,00,000, or both.

Critical

2

Code on Wages, 2019

Sections 5–7

Rule 5

Revise the Variable Dearness Allowance component of minimum wages whenever revised by the competent authority.

Revised twice yearly: before 1 April and before 1 October, subject to notified rates

Section 54(1)(a) where employee is paid less than the amount due

High

3

Code on Wages, 2019

Sections 10 and 13

Rule 6

Arrange working hours in accordance with the prescribed normal working day and permitted intervals.

Continuous / daily

Section 54(1)(c): Fine up to ₹20,000; repeat offence within 5 years: imprisonment up to 1 month, or fine up to ₹40,000, or both

High

4

Code on Wages, 2019

Section 13(1)(b)

Rule 7(1)

Allow every eligible employee the prescribed weekly day or days of rest.

Every week

Section 54(1)(c); repeat offence covered by Section 54(1)(d)

High

5

Code on Wages, 2019

Section 13(1)(b)

Rule 7(1) provisos

Inform employees of the fixed weekly rest days and any subsequent change by displaying a notice at a conspicuous place.

Before the change in rest day becomes effective

Section 54(1)(c); repeat offence covered by Section 54(1)(d)

Medium

6

Code on Wages, 2019

Section 13

Rule 7(2)

Do not require or allow an employee to work on a rest day unless a full substituted rest day is provided in the immediately preceding or following week.

Whenever an employee works on a rest day

Section 54(1)(c); repeat offence covered by Section 54(1)(d)

High

7

Code on Wages, 2019

Section 13

Rule 7(2) proviso

Ensure that substitution of the weekly rest day does not cause an employee to work for more than ten consecutive days without a full rest day.

Continuous monitoring

Section 54(1)(c); repeat offence covered by Section 54(1)(d)

High

8

Code on Wages, 2019

Sections 13 and 14

Rule 7(4)

Pay the prescribed wages for weekly rest days, work performed on a rest day and substituted rest days, including overtime wages where applicable.

With wages for the relevant wage period

Section 54(1)(a); repeat offence covered by Section 54(1)(b)

Critical

9

Code on Wages, 2019

Section 13

Rule 8

For night-shift employees, calculate the rest day and following day as consecutive 24-hour periods beginning when the shift ends; hours after midnight must be treated as part of the previous day.

For every applicable night shift

Section 54(1)(c); repeat offence covered by Section 54(1)(d)

Medium

10

Code on Wages, 2019

Section 14

Rule 10

Where the minimum wage is prescribed for a longer wage period, treat the longer wage period as monthly for overtime calculation.

Whenever overtime is calculated

Section 54(1)(a) where underpayment results; otherwise Section 54(1)(c)

High

11

Code on Wages, 2019

Section 10

—

Pay an employee the wages of a full normal working day where the employee worked fewer hours because the employer failed to provide work, subject to statutory exceptions.

For the relevant working day / wage period

Section 54(1)(a); repeat offence covered by Section 54(1)(b)

High

12

Code on Wages, 2019

Section 11

—

Where an employee performs two or more classes of work carrying different minimum wage rates, pay the applicable minimum rate for the time spent in each class.

Every wage period

Section 54(1)(a); repeat offence covered by Section 54(1)(b)

Critical

13

Code on Wages, 2019

Section 12

—

Pay piece-rate employees at not less than the applicable minimum time rate where no minimum piece rate has been fixed.

Every wage period

Section 54(1)(a); repeat offence covered by Section 54(1)(b)

Critical

14

Code on Wages, 2019

Section 14

Rule 10

Pay overtime for every hour or part thereof worked beyond the normal working day at not less than twice the normal rate of wages.

With wages for the relevant wage period

Section 54(1)(a); repeat offence covered by Section 54(1)(b)

Critical

15

Code on Wages, 2019

Section 15

—

Pay wages only through permitted modes: currency, cheque, bank credit or electronic mode, subject to any government notification mandating bank or cheque payment.

Every wage payment

Section 54(1)(c); repeat offence covered by Section 54(1)(d)

Medium

16

Code on Wages, 2019

Section 16

—

Fix a daily, weekly, fortnightly or monthly wage period for each employee; the wage period must not exceed one month.

At employment commencement and whenever revised

Section 54(1)(c); repeat offence covered by Section 54(1)(d)

High

17

Code on Wages, 2019

Section 17(1)(i)

—

Pay employees engaged on a daily basis at the end of the shift.

End of each shift

Section 54(1)(a); repeat offence covered by Section 54(1)(b)

Critical

18

Code on Wages, 2019

Section 17(1)(ii)

—

Pay weekly-rated employees on the last working day of the week, before the weekly holiday.

Last working day of each week

Section 54(1)(a); repeat offence covered by Section 54(1)(b)

Critical

19

Code on Wages, 2019

Section 17(1)(iii)

—

Pay fortnightly-rated employees before the end of the second day following the end of the fortnight.

Within 2 days after the fortnight ends

Section 54(1)(a); repeat offence covered by Section 54(1)(b)

Critical

20

Code on Wages, 2019

Section 17(1)(iv)

—

Pay monthly-rated employees before expiry of the seventh day of the succeeding month.

On or before the 7th day of the succeeding month

Section 54(1)(a); repeat offence covered by Section 54(1)(b)

Critical

21

Code on Wages, 2019

Section 17(2)

—

Pay all wages due to an employee who is removed, dismissed, retrenched, resigns or becomes unemployed due to closure.

Within 2 working days

Section 54(1)(a); repeat offence covered by Section 54(1)(b)

Critical

Sl. No.

Act Name

Section No.

Rule No.

Compliance

Due Date / Frequency

Penalty

Risk

1

Code on Wages, 2019

Section 15

—

Pay wages only through a permitted mode: current coin, currency notes, cheque, credit to employee’s bank account or electronic mode. Where the Government mandates bank/cheque payment for an establishment, comply with that notified mode.

At every wage payment

Section 54(1)(a) where non-compliance causes non-payment or short payment; otherwise Section 54(1)(c)

High

2

Code on Wages, 2019

Section 16

—

Fix a wage period for every employee as daily, weekly, fortnightly or monthly.

At commencement of employment / implementation of wage system

Section 54(1)(c): Fine up to ₹20,000

High

3

Code on Wages, 2019

Section 16

—

Ensure that the wage period fixed for any employee does not exceed one month.

Continuous

Section 54(1)(c)

High

4

Code on Wages, 2019

Section 17(1)(i)

—

Pay wages to daily-rated employees at the end of the shift.

End of each shift

Section 54(1)(a): Fine up to ₹50,000

Critical

5

Code on Wages, 2019

Section 17(1)(ii)

—

Pay wages to weekly-rated employees on the last working day of the week, before the weekly holiday.

Last working day of each week

Section 54(1)(a)

Critical

6

Code on Wages, 2019

Section 17(1)(iii)

—

Pay wages to fortnightly-rated employees before the end of the second day following the end of the fortnight.

Within 2 days after the fortnight ends

Section 54(1)(a)

Critical

7

Code on Wages, 2019

Section 17(1)(iv)

—

Pay wages to monthly-rated employees before expiry of the seventh day of the succeeding month.

On or before the 7th day of the succeeding month

Section 54(1)(a)

Critical

8

Code on Wages, 2019

Section 17(2)

—

Pay wages due to an employee who is removed, dismissed, retrenched, resigns or becomes unemployed due to closure of the establishment.

Within 2 working days

Section 54(1)(a)

Critical

9

Code on Wages, 2019

Section 18(1) and 18(2)

—

Make deductions from wages only when specifically authorised under the Code and only for a permitted purpose.

At every payroll processing

Section 54(1)(a) where unlawful deduction results in short payment; otherwise Section 54(1)(c)

Critical

10

Code on Wages, 2019

Section 18(3) and 18(4)

Rule 13

Ensure that aggregate deductions do not exceed 50% of wages for a wage period. Carry forward any permitted excess and recover it in succeeding periods without exceeding the 50% monthly ceiling.

Every wage period

Section 54(1)(a)

Critical

11

Code on Wages, 2019

Section 18(2)(k)

—

Obtain the employee’s written authorisation before deducting registered trade-union membership fees or contributions.

Before making the deduction

Section 54(1)(a) / 54(1)(c), depending on the default

High

12

Code on Wages, 2019

Section 18(2)(o)

—

Obtain the employee’s written authorisation before deducting contributions to the Prime Minister’s National Relief Fund or another notified fund.

Before making the deduction

Section 54(1)(a) / 54(1)(c)

High

13

Code on Wages, 2019

Section 19(1)–(3)

Rules 14–16

Obtain approval for the acts or omissions attracting fines, display the prescribed notice, send its copy to the Inspector-cum-Facilitator, and give the employee an opportunity to be heard before imposing a fine.

Before imposing any fine

Section 54(1)(c)

High

14

Code on Wages, 2019

Section 19(4)–(8)

—

Observe the 3% ceiling on fines, do not fine employees below 15 years, recover fines within 90 days without instalments, maintain the fine register, and use realisations only for approved employee-benefit purposes.

At every imposition/recovery of fine

Section 54(1)(a), 54(1)(c), or 54(2), according to default

High

15

Code on Wages, 2019

Section 20

Rule 17

Make absence deductions proportionately. For deduction relating to concerted absence by ten or more employees, intimate the Inspector-cum-Facilitator with reasons.

Intimation within 10 days from deduction

Section 54(1)(a) / 54(1)(c)

High

16

Code on Wages, 2019

Section 21

Rule 18

Before deducting for damage or loss, explain the loss in writing, establish attribution to neglect/default, provide an opportunity to explain, restrict deduction to actual loss, and intimate the employee after deduction.

Before deduction; post-deduction intimation within 15 days

Section 54(1)(a) / 54(1)(c)

High

17

Code on Wages, 2019

Section 21(3)

—

Record deductions and realisations for damage or loss in the prescribed register.

At every deduction/recovery

Section 54(2): Fine up to ₹10,000

Medium

18

Code on Wages, 2019

Section 22

—

Deduct for accommodation, amenities or services only where accepted by the employee as a term of employment or otherwise, and do not exceed their value.

At every applicable payroll

Section 54(1)(a) / 54(1)(c)

High

19

Code on Wages, 2019

Section 23

Rule 19

Recover advances in accordance with the prescribed conditions, observe the 50% ceiling, and record recovery particulars in Form IV.

Every wage period in which recovery occurs

Section 54(1)(a) and Section 54(2) for register default

High

20

Code on Wages, 2019

Section 24

Rule 20

Recover approved house-building or other loans and interest only according to applicable Central Government instructions governing the loan extent and interest rate.

Every applicable wage period

Section 54(1)(a) / 54(1)(c)

High

Sl. No.

Act Name

Section No.

Rule No.

Compliance

Due Date / Frequency

Penalty

Risk

1

Code on Wages, 2019

Section 41(2)

—

Determine applicability of the Payment of Bonus provisions. The Chapter applies to an establishment in which 20 or more persons are employed or were employed on any day during the accounting year, subject to the exclusions under Section 41(1).

At the beginning of each accounting year and whenever employee strength reaches 20

Section 54(1)(c): Fine up to ₹20,000; repeat similar offence within 5 years: imprisonment up to 1 month or fine up to ₹40,000 or both

High

2

Code on Wages, 2019

Section 26(1)

—

Identify every eligible employee who: (a) draws wages not exceeding the notified monthly eligibility limit; and (b) has worked for at least 30 days during the accounting year.

Annually, before bonus computation

Section 54(1)(a) where an eligible employee is denied or underpaid bonus

Critical

3

Code on Wages, 2019

Sections 26(1) and 26(2)

—

Calculate and pay annual minimum bonus at 8⅓% of wages earned or ₹100, whichever is higher, even where the employer has no allocable surplus, subject to the provisions applicable to new establishments.

Annually

Section 54(1)(a): Fine up to ₹50,000; repeat offence within 5 years: imprisonment up to 3 months or fine up to ₹1,00,000 or both

Critical

4

Code on Wages, 2019

Section 26(2)

—

Where an employee’s wages exceed the notified bonus-calculation ceiling, calculate bonus by treating wages as the notified amount or the applicable minimum wage, whichever is higher.

Annually, during bonus computation

Section 54(1)(a)

Critical

5

Code on Wages, 2019

Section 26(3)

—

Where allocable surplus exceeds the minimum bonus liability, calculate bonus proportionately to wages earned, subject to the maximum ceiling of 20% of wages.

Annually

Section 54(1)(a)

Critical

6

Code on Wages, 2019

Section 26(5)

—

Where production- or productivity-linked bonus is payable under an agreement or settlement, ensure that total bonus, including statutory minimum bonus, does not exceed 20% of wages earned during the accounting year.

At the time of finalising or paying such bonus

Section 54(1)(c), or Section 54(1)(a) where the employee receives less than the statutory amount due

High

7

Code on Wages, 2019

Sections 26(6)–(9)

Rules 21 and 22

For a new establishment, determine the correct bonus computation based on its year of operation: first five accounting years, sixth year, seventh year and eighth year onward. Apply the special set-on/set-off provisions to new departments, undertakings or branches where applicable.

Annually

Section 54(1)(a) where incorrect treatment causes short payment; otherwise Section 54(1)(c)

High

8

Code on Wages, 2019

Section 26(7)(i)

Rule 21; Schedule A

For the sixth accounting year, calculate set-on or set-off by considering the excess or deficiency of allocable surplus relating to the fifth and sixth accounting years, in the manner illustrated in Schedule A.

During bonus computation for the sixth accounting year

Section 54(1)(a) / Section 54(1)(c)

High

9

Code on Wages, 2019

Section 26(7)(ii)

Rule 22; Schedule A

For the seventh accounting year, calculate set-on or set-off by considering the excess or deficiency relating to the fifth, sixth and seventh accounting years, in the manner illustrated in Schedule A.

During bonus computation for the seventh accounting year

Section 54(1)(a) / Section 54(1)(c)

High

10

Code on Wages, 2019

Sections 27 and 28

—

Where an employee has not worked for all working days, calculate proportionate bonus after including deemed working days such as paid leave, maternity leave with wages, qualifying lay-off and temporary disablement caused by an employment accident.

Annually, employee-wise

Section 54(1)(a)

High

11

Code on Wages, 2019

Section 29

—

Disqualify an employee from bonus only where the employee is dismissed for a ground expressly mentioned in Section 29: fraud, riotous or violent behaviour, theft, misappropriation, sabotage, or conviction for sexual harassment.

At the time of determining employee eligibility

Section 54(1)(a) where bonus is unlawfully withheld; otherwise Section 54(1)(c)

High

12

Code on Wages, 2019

Section 30

—

Treat all departments, undertakings and branches as one establishment for bonus computation unless separate balance sheets and profit-and-loss accounts are prepared and maintained and the statutory conditions for separate treatment are satisfied.

Annually, before computing gross profit and bonus

Section 54(1)(a) / Section 54(1)(c)

High

13

Code on Wages, 2019

Section 31

—

Calculate allocable surplus as 60% of available surplus for a banking company and 67% for any other establishment.

Annually

Section 54(1)(a) where incorrect calculation causes short payment

Critical

14

Code on Wages, 2019

Section 32(a)

Rule 23; Schedule B

A banking company must calculate gross profit for bonus purposes in accordance with Schedule B, including the prescribed additions and deductions from the profit shown in its profit-and-loss account.

Annually, after finalisation of accounts and before bonus calculation

Section 54(1)(a) where short payment results; otherwise Section 54(1)(c)

High

15

Code on Wages, 2019

Section 32(b)

Rule 24; Schedule C

An employer other than a banking company must calculate gross profit for bonus purposes in accordance with Schedule C, including the prescribed additions and deductions from net profit.

Annually, after finalisation of accounts and before bonus calculation

Section 54(1)(a) where short payment results; otherwise Section 54(1)(c)

High

16

Code on Wages, 2019

Section 33

—

Calculate available surplus by deducting the prior charges under Section 34 from gross profit and by making the prescribed adjustment relating to direct tax and bonus of the immediately preceding accounting year.

Annually

Section 54(1)(a) / Section 54(1)(c)

High

17

Code on Wages, 2019

Section 34(a) and (b)

—

Deduct admissible depreciation and applicable direct tax from gross profit as prior charges while computing available surplus.

Annually

Section 54(1)(a) where incorrect computation results in short payment

High

18

Code on Wages, 2019

Section 34(c)

Rule 25; Schedule D

Deduct the further sums prescribed in Schedule D according to the employer category—company, banking company, corporation, cooperative society, firm, individual, HUF or other employer.

Annually

Section 54(1)(a) / Section 54(1)(c)

High

19

Code on Wages, 2019

Section 34(c)

Rule 25; Schedule D, Item 1

A company other than a banking company must calculate further deductions comprising applicable preference dividend, 8.5% of paid-up equity capital and 6% of qualifying reserves, subject to the special rule applicable to a foreign company.

Annually

Section 54(1)(a) / Section 54(1)(c)

High

20

Code on Wages, 2019

Section 35

—

Calculate direct tax for bonus purposes in accordance with the special computation requirements under Section 35 and not merely according to the tax expense appearing in the financial statements.

Annually

Section 54(1)(a) where incorrect calculation causes short payment

High

21

Code on Wages, 2019

Section 36(1)

Rule 26; Schedule A

Where allocable surplus exceeds the maximum bonus payable, carry forward the excess as set-on, subject to the ceiling of 20% of the total salary or wages of employees, for utilisation up to and including the fourth succeeding accounting year.

Annually

Section 54(1)(a) where non-adjustment causes short payment in a succeeding year; otherwise Section 54(1)(c)

High

22

Code on Wages, 2019

Section 36(2)

Rule 27; Schedule A

Where there is no available surplus or allocable surplus is insufficient to pay minimum bonus, carry forward the deficiency as set-off for adjustment up to and including the fourth succeeding accounting year.

Annually

Section 54(1)(a) / Section 54(1)(c)

High

23

Code on Wages, 2019

Section 36(4)

Rules 26 and 27; Schedule A

While calculating bonus for a succeeding accounting year, adjust the earliest outstanding set-on or set-off amount first and allow amounts to lapse after the permitted four-year period.

Annually

Section 54(1)(a) / Section 54(1)(c)

High

24

Code on Wages, 2019

Section 37

—

Where customary, puja or interim bonus has already been paid, adjust only that amount against statutory bonus and pay the remaining balance to the employee.

At the time of final bonus payment

Section 54(1)(a)

High

25

Code on Wages, 2019

Section 38

—

Deduct financial loss caused by an employee’s misconduct only from the bonus payable for the same accounting year and only to the extent of that loss.

At the time of bonus calculation for the relevant year

Section 54(1)(a) where excess deduction results in short payment

High

26

Code on Wages, 2019

Section 39(1)

—

Pay all bonus amounts by crediting the bonus to the employee’s bank account.

Within 8 months from the close of the accounting year

Section 54(1)(a)

Critical

27

Code on Wages, 2019

Section 39(1), proviso

—

Where bonus cannot be paid within eight months, apply to the appropriate Government or specified authority for extension, supported by sufficient reasons. Total extended period cannot exceed two years.

Application should be made before expiry of the original 8-month period

Section 54(1)(a) if payment is delayed without a valid extension

Critical

28

Code on Wages, 2019

Section 39(2)

—

Where a bonus dispute is settled or an award becomes enforceable, pay the bonus determined under the settlement or award.

Within 1 month from the settlement becoming operative or award becoming enforceable

Section 54(1)(a)

Critical

29

Code on Wages, 2019

Section 39(2), proviso

—

Where a dispute concerns payment of bonus at a higher rate, pay at least 8⅓% of wages within the normal statutory period instead of withholding the entire bonus pending resolution.

Within 8 months from the close of the accounting year

Section 54(1)(a)

Critical