The move will be a major relief for employers who have been demanding that either the government offer them a wage stimulus or not mandate payment of wages due to the lockdown as their businesses are hit
New Delhi: Companies which are closed, and where the workers are not working during the current lockdown are no more required mandatorily to pay wages to their employees.
The home ministry guidelines for lockdown 4.0 have nullified a March 29 order that has asked employers to pay wages to employees irrespective of their presence in the workspace. The move will be a major relief for employers who have been demanding that either the government offer them a wage stimulus or not mandate payment of wages due to the lockdown as their businesses are hit.
Since, the financial stimulus package announced by the centre did not offer a wage stimulus this will be seen a key development for industries, and comes as some employers have challenged the constitutionality of that 29 March directive. Last week, the Supreme Court had asked government not to take any coercive measure action against companies who are not paying wages during lockdown as per the home ministry order.
“Save as otherwise provided in the guidelines annexed to this order, all order issued by the NEC (national executive committee) under Section 10(2)(I) of the Disaster Management (DM) Act, 2005, shall cease to have effect from 18.05.2020," the home ministry guidelines issued on Sunday has mentioned. Though the order has mentioned various guidelines related to the lockdown, it has omitted the 29 March order related to wages.
The March 29 order invoking the same clause of the disaster management act 2005 had said: “All the employers, be it in the shops and commercial establishment, shall make payment of wages of their workers, at their workplace, on the due date, without any deduction, for the period their establishment are under closure during the lockdown."
Industries and their federations have been demanding wage stimulus from the government. During a meeting with labour secretary earlier this month, industry leaders of Federation of Indian chambers of Commerce and Industry had requested for a 50% wage subsidy and underlined that in the absence of such a relief they may let go of some workers due to business loss.