MHA withdraws order directing companies to pay full wages to employees during lockdown

The government has withdrawn its order directing companies and commercial units to pay full wages to workers even when they are not in operation during the Covid-19-induced nationwide lockdown, which began on March 25. The lockdown, imposed to prevent the spread of the novel coronavirus, entered its fourth phase on Monday. The government’s move is expected to bring relief to a large number of industries and companies which were unable to pay full 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. 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.