National Floor Wage under the Code on Wages, 2019 – A Brief Note
The Code on Wages, 2019 empowers the Central Government to fix a National Floor Wage (NFW) after considering the minimum living standards of workers and other relevant factors.
Key Features
Statutory and legally binding: Unlike the earlier National Floor Level Minimum Wage (?176 per day, last revised in 2017), the new National Floor Wage will have legal force under the Code on Wages.
Minimum benchmark: No State or Union Territory can notify a minimum wage below the National Floor Wage. However, States are free to fix higher minimum wages based on local conditions.
Regional variation: The Central Government may prescribe different floor wages for different geographical regions, considering variations in the cost of living.
Consultative process: The National Floor Wage will be recommended after consultation with the Central Advisory Board, comprising representatives of employers, employees, independent experts, and State Governments. S
Latest Update (July 2026)
The Ministry of Labour & Employment has initiated the exercise to determine the National Floor Wage, including updating the consumption basket and consultation methodology. Once notified, it will become the statutory national wage floor applicable across India.
Impact on Employers
States may need to revise their minimum wages if they are below the notified floor wage.
Employers must ensure compliance with revised minimum wage notifications.
Payroll structures and labour cost planning may require review after notification.
Impact on Workers
Provides a uniform minimum wage protection across India.
Reduces regional wage disparities.
Strengthens social and economic security for low-paid workers.
Takeaway:
The National Floor Wage under the Code on Wages, 2019 is a landmark reform that establishes a uniform statutory wage floor across India, while allowing States to prescribe higher minimum wages based on regional economic conditions.
It aims to ensure a basic standard of living for workers and promote fair wage practices nationwide
