Karnataka’s draft wage rules mirror Centre’s rules, raise concerns on worker coverage

Karnataka's draft wage rules echo central guidelines, raising concerns over worker coverage and potential wage suppression.

Projected as a step towards universal wage protection, the Karnataka’s draft Code on Wages Rules largely mirror the Centre’s framework, one that labour union members argued establishes low wages, weakens enforcement and leaves most workers outside its effective coverage.

The draft, they argued, reflects the limited scope States have to correct structural flaws embedded in a centrally-designed law and may end up depressing wages rather than protecting them.

Released on January 27, the draft Code on Wages (Karnataka) Rules lay down procedures for fixing and enforcing minimum wages in the State. However, unions said they retain key features of the central Code, including discretionary floor wage fixation, a narrowed definition of wages and diluted enforcement mechanisms. 

The Code on Wages, 2019, subsumed four labour laws- relating to minimum wages, payment of wages, bonuses and equal remuneration- into a single legislation. The Union government has pitched it as a reform to simplify compliance, ensure uniformity across States and extend wage protection to all workers, with the Karnataka’s draft rules meant to operationalise the law.

However, Satyanand Mukund, State secretary of the All India Trade Union Congress, said the Code effectively excludes over 90% of India’s workforce, particularly informal, women and domestic workers. He argued that digital compliance systems and employer self-reporting disadvantage workers who lack documentation, bargaining power and access to grievance redressal. 

The Karnataka draft details the classification of workers by skill level and zones- metropolitan, non-metropolitan and rural- and bases wage calculations on the needs of a standard working-class family, including food, clothing, housing, education and medical expenses. It also mandates annual dearness allowance (DA) revision linked to inflation.