Maharashtra Code on Wages Draft Rules 2026: Complete Employer Guide

Maharashtra Code on Wages Draft Rules 2026: Complete Employer Guide

Maharashtra has gazetted the Maharashtra Code on Wages Rules, 2026 — draft rules implementing the Code on Wages, 2019 (Central Act 29 of 2019), replacing four legacy wage laws with a single unified framework. This guide covers every major change for HR managers, payroll teams, and business owners.

What the Code on Wages Replaces

Old Law	Year	Coverage
Payment of Wages Act	1936	Timely wage payment, authorised deductions
Minimum Wages Act	1948	Minimum wages for scheduled employments
Payment of Bonus Act	1965	Annual bonus eligibility and computation
Equal Remuneration Act	1976	Equal pay for men and women

Key Changes: Old Law vs New Draft Rules 2026

Area	Old Position	New Draft Rules 2026
Wage Floor Coverage	Scheduled employments only	All employees across all establishments — universal floor wage
Skill Categories	Unskilled, semi-skilled, skilled	Unskilled, semi-skilled, skilled, highly skilled (new 4th category)
Minimum Wage Formula	Historical norms, state advisory	Codified: 2,700 cal/day, 66m cloth/year, housing 10%, fuel/misc 20%, education/medical 25%
VDA Revision	Twice yearly	Retained — 1 April and 1 October, linked to CPI-IW (Rule 5)
Weekly Rest Days	One paid rest day (typically Sunday)	6-day week → Sunday; <6-day week → Saturday and Sunday
Max Consecutive Days	Implied limits	10 consecutive working days maximum without a rest day (Rule 7)
Wage Period	Monthly, fortnightly, or weekly	Longer wage period fixed as monthly (Rule 10)
Deductions Cap	50% per wage period	Retained at 50%; excess carried forward to next period (Rule 12)
Fine Approval Authority	Regional authority	Commissioner of Labour, Maharashtra State (Rule 13); deemed approved if not decided in 30 days
Registers	Physical registers under multiple Acts	Electronic or physical; Form I (Employee), Form IV (Wages/OT/Fines), Form IX (Attendance); preserved 5 years
Wage Slip	Physical wage slip	Electronic or physical (Form V) — issued on or before payment of wages
Undisbursed Wages	Deposit after 3 years	Nominee: deposit after 3 months; no nominee: after 6 months; unclaimed 7 years → Maharashtra Labour Welfare Board
Inspector Role	Inspector under respective Act	Inspector-cum-Facilitator — facilitation-first mandate, not just enforcement
Composition of Offences	No uniform provision	Compounding at 50% of maximum applicable fine (Rule 46)

Minimum Wage Calculation Methodology (Rule 3)

For the first time, Maharashtra state rules codify the minimum wage formula. The standard family unit is the earning employee + spouse + 2 children (3 adult consumption units). The methodology requires:

• Net caloric intake: 2,700 calories per day per consumption unit
• Clothing: 66 metres of cloth per year per standard family
• Housing: 10% of food and clothing expenditure
• Fuel, electricity, miscellaneous: 20% of minimum wage
• Education, medical, recreation, contingencies: 25% of minimum wage

When a daily rate is fixed: divide by 8 for hourly rate, multiply by 26 for monthly rate. For a five-day working week, the hourly rate derives the daily and monthly rates — payroll systems on compressed weeks need to verify their calculation methodology.

Technical Committee for Skill Categorisation (Rule 4)

A Technical Committee under the Labour Commissioner will advise the State Government on classifying occupations into four skill tiers. Members include the Labour Commissioner (Chairperson), Director of Industrial Safety and Health, Commissioner of Skill Development, two wage determination experts, and two employer and employee representatives each. This committee’s recommendations will determine which minimum wage rate applies to each role — employers in manufacturing and services should track its notifications.

Payment of Wages Key Rules

• Rule 15: Fine approval must be disposed within 30 days — after which it is deemed approved
• Rule 16: Deductions under Section 20 proviso must be intimated to Inspector-cum-Facilitator within 10 days
• Rule 17: Damage/loss deductions: written explanation + opportunity to respond; intimation within 15 days
• Rule 18: Advance recovery limited to 50% of wages per wage period

Undisbursed Dues (Rules 38–40)

Key timelines for unclaimed wages — critical for companies with high attrition or deceased/absconding employees:

• Wages owed to employee whose nominee cannot be paid within 3 months → employer deposits with Asst Commissioner of Labour having geographical jurisdiction
• No nominee, wages unclaimed for 6 months → deposit with Asst Commissioner within 15 days thereafter
• Deposited amounts invested in government securities or fixed deposits; notice published in official website, gazette, and two local vernacular newspapers
• Unclaimed for 7 years after public notice → transferred to Maharashtra Labour Welfare Board for promoting labour welfare

Employer Preparation Checklist

Action Item	Priority
Re-categorise workforce into 4 skill tiers; add “highly skilled” category	HIGH
Update payroll system for 5-day week hourly-based daily wage calculation	HIGH
Calendar biannual VDA revisions (1 April, 1 October)	MEDIUM
Migrate wage slips to electronic format (Form V); issue on or before payment	MEDIUM
Set up employee nominee nomination system (Form VII) for all employees	MEDIUM
Update registers to Forms I, IV, IX; plan 5-year retention policy	LOW

Frequently Asked Questions

Are these rules currently in force?
No. These are draft rules published for public consultation on 28 April 2026. They come into force only after final notification, expected August–November 2026.

Will existing employment contracts need revision?
Minimum wage is a statutory floor — any contract below the new minimum for the applicable skill category is automatically void. Contracts above the minimum are unaffected unless they reference specific old-law provisions.

What is the Inspector-cum-Facilitator?
A new combined role replacing multiple inspectors from the old laws. The key difference: a facilitation-first mandate — proactive guidance before enforcement.

How is “highly skilled” determined?
The Technical Committee under Rule 4 classifies occupations into skill tiers and updates Schedule A. Until final rules are notified, employers should internally classify roles with documented rationale.

Can we still pay wages in cash?
Yes. The Code on Wages permits payment by cash, cheque, or bank transfer. The State Government may specify digital payment modes for certain establishment categories.

Download the Official Draft Rules

How TMS Helps Your Business Stay Compliant

The transition from four legacy wage laws to the Code on Wages requires reconfiguring payroll systems, updating employment documentation, and re-training HR teams. TMS (Team Management Services) is one of Maharashtra’s most experienced labour law compliance and HR services firms, working with manufacturers, IT/ITeS companies, retail chains, logistics providers, and professional services firms across the state.

Our Labour Code compliance services:

• Workforce skill-tier mapping — categorising employees into four statutory skill levels with documentation for each role
• Minimum wage audit — identifying shortfalls against new floor rates before they become legal liabilities
• Payroll restructuring — updating CTC structures to comply with the Code on Wages gross wage definition and VDA methodology
• Register migration — transitioning from old Act registers to Forms I, IV, and IX with electronic capability
• Contract staffing — contract staffing solutions where TMS manages compliance as the employer of record, transferring the minimum wage compliance burden
• Payroll outsourcing — end-to-end payroll management with built-in Code on Wages compliance and automatic VDA updates

For a free consultation on what the Maharashtra Code on Wages Draft Rules mean for your business, contact our team today. The 45-day consultation window is the right time to understand your exposure and begin preparing.