Section 5 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 5 of the Code on Wages, 2019 is a one-sentence duty with large consequences: no employer shall pay any employee wages less than the minimum rate of wages notified by the appropriate Government. Everything else in the minimum wages chapter (sections 6 to 14) explains how that rate is set, built up and applied.
No employer shall pay to any employee wages less than the minimum rate of wages notified by the appropriate Government (s.5). The duty is on the employer, it protects every "employee" as defined, and the rate comes from a notification under sections 6 to 9. Paying less than due is punishable under s.54(1)(a) with fine up to fifty thousand rupees, the employer must prove payment in a claim (s.59), and an employee cannot contract out of the amount (s.60). The Code does not state any minimum wage figure; it is notified separately.
What the section says
The full text is: "No employer shall pay to any employee wages less than the minimum rate of wages notified by the appropriate Government."
| Element | Meaning |
|---|---|
| "No employer" | Any person within the definition of employer in s.2(l), which includes a contractor |
| "any employee" | Any "employee" under s.2(k), which is wider than "worker"; managerial and administrative staff are employees |
| "wages" | Wages as defined in s.2(y) |
| "minimum rate of wages notified" | The rate notified by the appropriate Government under s.6 (see s.2(s)), subject to the floor wage under s.9 |
| "appropriate Government" | Central Government or State Government as per s.2(d) |
The section is short because the substance is elsewhere. It makes the notified rate a legal floor for every employee; s.5 is not limited to particular industries, and the notified categories and areas decide the floor for a given person.
The rate must be notified
Section 5 refers to the rate "notified" by the appropriate Government. Under s.2(t), a notification means one published in the Gazette of India or the Official Gazette of a State. So the number you must pay comes from a Gazette notification, not from this Code. The Code itself does not state any current minimum wage or floor wage amount, and neither does this article. For the figure that applies to your State and category, use the State or Central notification and our state-wise guides, such as minimum wages in India, state-wise.
Where the Central Government is the appropriate Government, the Central Rules, 2026 (G.S.R. 343(E), 8 May 2026) apply, including rule 3 on how the daily, hourly and monthly rates are worked out. Where the State Government is the appropriate Government, the State's own wage rules apply. See section 6 for how the rate is fixed.
Payroll teams that want a line-by-line check of payslips against the notified rates, by category, area and wage period, can use our payroll compliance audit service.
How sections 6 to 14 sit under section 5
| Section | What it adds to the floor |
|---|---|
| s.6 | The appropriate Government fixes the rate for time work or piece work, with wage periods by hour, day or month |
| s.7 | The rate may be a basic rate plus cost of living allowance, or include cash value of concessions, or be all-inclusive |
| s.8 | Committee or published proposals, and revision at an interval not exceeding five years |
| s.9 | Minimum rates fixed by the appropriate Government shall not be less than the floor wage |
| s.10 to s.12 | Short working day, two classes of work, and piece work at not less than the time rate |
| s.13 and s.14 | Normal working day, rest day and overtime at not less than twice the normal rate |
What happens if an employer pays less
The Code attaches several consequences to underpayment, each in its own section:
- Penalty. Under s.54(1)(a), an employer who pays any employee less than the amount due under the Code is punishable with fine which may extend to fifty thousand rupees. Under s.54(1)(b), if the employer, having been convicted under clause (a), is again found guilty of a similar offence within five years from the date of the commission of the first or subsequent offence, the second and subsequent commission is punishable with imprisonment up to three months, or fine up to one lakh rupees, or both. See section 54.
- Burden of proof. Under s.59, where a claim has been filed for less payment of wages, the burden to prove the dues have been paid is on the employer.
- No waiver. Under s.60, any contract or agreement by which an employee relinquishes the right to any amount due under the Code is null and void so far as it purports to remove or reduce the liability to pay. An employee's written consent to a lower wage does not cure a breach of s.5. See sections 59 and 60.
- Claims. Section 45 provides the claims procedure; see section 45.
Practical points
Keep the latest Gazette notification on file for each category and area; check how the rate is built under s.7 before deciding which components count; remember that a contractor is also an employer (see payment of wages to contract labour). For a checklist, see minimum wages compliance for employers.
Example. A State has notified a daily minimum rate for a skilled category in a given area. An employer pays a skilled worker in that area a lower daily amount because the worker "agreed". Under s.5 the employer has paid less than the notified rate; under s.60 the agreement is void to that extent; in a claim, s.59 puts the burden on the employer to show that the full amount was paid; and s.54(1)(a) provides for a fine of up to Rs 50,000.
Need help checking payslips against notified rates?
Underpayment is easy to miss when rates are revised or when categories differ by area. Our payroll compliance audit team can compare your payroll against the notified rates and tell you where the gaps are.
Key takeaways
- Section 5 bars any employer from paying any employee less than the minimum rate of wages notified by the appropriate Government.
- The number is in the notification, not in the Code.
- Underpayment is punishable under s.54(1)(a) with fine up to fifty thousand rupees, with higher punishment for repeat offences within five years.
- The employer bears the burden of proving payment (s.59), and the employee cannot contract out (s.60).
- Sections 6 to 14 explain how the rate is fixed and applied.
Read next
- Section 6: fixation of minimum wages
- Section 9: floor wage fixed by the Central Government
- Section 54: penalties for offences
- Minimum wages under the new Labour Codes
Disclaimer: Based on the Code on Wages, 2019 (as enacted) and, where noted, the Code on Wages (Central) Rules, 2026 (G.S.R. 343(E), 8 May 2026), as on 1 October 2026. The Code is in force from 21 November 2025; State Governments make their own rules for establishments where the State is the appropriate Government, and wage rates are notified separately. Verify the current position before acting.