Labour Law Blog

Code on Wages, 2019: Complete Guide to Salary Components Included and Excluded in “Wages” and the 50% Rule

The Code on Wages, 2019 introduces a uniform definition of “wages” under Section 2(y), replacing the different definitions that previously existed under various labour laws. The definition broadly includes Basic Salary, Dearness Allowance (DA), and Retaining Allowance, along with other fixed remuneration unless specifically excluded. Certain components such as House Rent Allowance (HRA), conveyance allowance, statutory bonus, employer PF/ESI contributions, gratuity, and reimbursements are expressly excluded from wages.