Equal Pay and Gender Wage Gap Obligations Under the Code on Wages

Equal pay for equal work between men and women is not a new idea in Indian law, but it now sits inside the Code on Wages, 2019, one of the four Labour Codes that took effect on 21 November 2025. Employers need to understand what actually changed and what stayed the same.

Key facts at a glance

• The Code on Wages, 2019 prohibits wage discrimination based on gender for the same work or work of a similar nature.
• This provision carries forward the core principle of the earlier Equal Remuneration Act, 1976, which the Code subsumes.
• The obligation covers recruitment, wage payment and conditions of service, not just the hiring stage.
• All four Labour Codes came into force on 21 November 2025, but state-level rules are still being notified, so operational enforcement varies by state.
• Pay differences must be based on a genuine non-gender factor (seniority, qualification, experience, performance) to be lawful.
• India does not currently mandate a published gender pay-gap report, unlike some other jurisdictions.

What the Code on Wages actually requires

The Code consolidates four earlier wage-related laws, including the Equal Remuneration Act, 1976, into a single framework. Its equal pay provision requires that there be no discrimination on the ground of gender in matters relating to wages, for employees performing the same work or work of a similar nature. "Work of a similar nature" is judged by the actual duties, skill, effort and responsibility involved - not job titles, which employers sometimes vary specifically to create pay differences that are hard to challenge on paper.

Importantly, the prohibition extends beyond the wage figure itself to recruitment practices - an employer cannot advertise or recruit differently for men and women for the same role - and to broader conditions of service.

What counts as a lawful pay difference

Not every pay gap between a man and a woman doing similar work is unlawful. The Code, consistent with the earlier Equal Remuneration Act framework, allows differences based on legitimate, gender-neutral factors:

The test in practice is whether the employer can point to a real, documented, non-gender reason for the difference. Employers who cannot articulate one - because pay was set informally or through individual negotiation without a consistent framework - are the most exposed.

Why this matters more under the Labour Codes

Three practical changes make equal pay a sharper compliance issue now than before the Codes:

1. Consolidation increases visibility. Wage-related obligations that used to sit in a standalone Act are now part of the same Code that governs minimum wages, payment of wages and bonus, making it easier for inspectors and employees to raise related issues together.
2. The 50% wage rule affects pay structuring. Under the Code, allowances cannot exceed 50% of total remuneration, which forces many employers to restructure salary components - a natural moment to also audit whether historic gender pay gaps have crept into the base structure.
3. Uneven state rollout creates uncertainty. Because states are still notifying their own rules following the 21 November 2025 commencement, enforcement mechanisms and procedures can vary by location in the near term, so employers with multi-state operations should track each state's status rather than assume uniform enforcement everywhere.

A practical equal pay audit

1. Group employees by role and level, not job title, to compare like-for-like work.
2. Calculate the pay gap within each group by gender, looking at total compensation, not just base salary.
3. Identify a documented, non-gender justification for any gap found, or flag it for correction.
4. Review recruitment and offer practices to confirm starting offers are not systematically lower for one gender in the same role.
5. Revisit the audit annually, especially after any compensation restructuring driven by the Labour Codes' wage-definition changes.

What to do if you find a gap

Where an unexplained gap exists, the safer path is to correct it going forward and document the remediation, rather than leave it in place. Left unaddressed, an unexplained gender pay gap is both a legal exposure under the Code on Wages and a retention and reputational risk.

If you're not sure how your organisation's pay structure holds up under the Code on Wages, ComplianceCheck's labour code assessment gives you a clear picture in a few minutes.

Sources

• Ministry of Labour and Employment - labour.gov.in
• Code on Wages, 2019 (official text and notifications) - labour.gov.in
• Respective state labour department websites for state-specific rules

This guide is general information, not legal advice. Requirements vary by state, sector and headcount - confirm specifics with a compliance professional or the relevant authority.