Equal Remuneration Act, 1976: Provisions, Penalties and Status
Table of Contents
The Equal Remuneration Act, 1976 is a central law that required employers to pay men and women equally for the same or similar work. It is no longer in force, as the Code on Wages, 2019 replaced it on 21 November 2025. This guide explores what the old law required, what the new one changes, and the penalties and compliance steps for employers.
Key Takeaways
- The Code on Wages, 2019 replaced the Equal Remuneration Act, 1976 on 21 November 2025.
- Employers must continue to pay equal wages for the same or similar work under the Code.
- The Code prohibits wage discrimination on the ground of gender, while the Act referred only to men and women.
- Employers cannot reduce any employee’s wages to remove a pay gap. They must raise the lower wage instead.
- Now, employees get 3 years to file a claim for unequal wages.
- Paying an employee less than the amount due now carries a fine of up to ₹50,000.
What is the Equal Remuneration Act, 1976?
The Equal Remuneration Act, 1976 was a central legislation governing pay equity, requiring employers to pay men and women equally for the same work or work of a similar nature. It also prohibited discrimination against women in recruitment, promotions, training, and transfers. The legislation applied across India without any minimum employee threshold. It remained in force until the Code on Wages replaced it on 21 November 2025.
Key Provisions of the Equal Remuneration Act, 1976
The Act established 5 core statutory provisions governing employment and remuneration practices:
- Broad definition of remuneration: The Act counted the basic wage or salary and every additional emolument, in cash or in kind. So, employers had to compare the full salary structure, not just the basic pay.
- Same or similar work: Work was considered similar when it required the same skill, effort, and responsibility, and was performed under identical working conditions.
- Equal pay: The Act prohibited employers from paying one sex less than the other for the same or similar work. Additionally, employers could not reduce anyone’s pay to comply.
- Recruitment and service conditions: The Act prohibited discrimination against women in recruitment and service conditions. After the 1987 amendment, it also covered promotions, training, and transfers. Employers using recruitment software should apply the same selection criteria to every candidate.
- Overriding effect: The Act prevailed over any award, agreement, or contract of service that was inconsistent with it.
How did the Code on Wages, 2019 Replace the Act?
The change took place in 3 steps between November 2025 and May 2026.
- Commencement: The government brought the Code into force on 21 November 2025, as confirmed by PIB. It is one of the four new labour codes in India.
- Repeal: The Code repealed the Payment of Wages Act, the Minimum Wages Act, and the Payment of Bonus Act.
- Central rules: On 8 May 2026, the government notified the Code on Wages (Central) Rules. These rules govern central sphere establishments, whereas non-central establishments fall under their respective State Rules.
Equal Remuneration Act vs Code on Wages: What Changed?
Here is a table that shows what the Code changed and what it kept the same.
| Area | Under the Act | Under the Code |
|---|---|---|
| Protected Class | It protected men and women workers. | It prohibits wage discrimination on the ground of gender. |
| Definition of Compensation | It used the term “remuneration”. | It uses the term “wages”. |
| Standard for Work Evaluation | Evaluated skill, effort, and responsibility | Evaluates skill, effort, responsibility, and experience |
| Time limit for claims | The Act did not specify a limit. | Employees get 3 years to file a claim. |
| Inspections | Inspectors checked employer records. | Inspector-cum-Facilitators inspect and advise employers. |
| Records | Employers kept one prescribed register. | Central employers keep Forms I, IV, and IX for 5 years. |
Penalties under the Code
The Code encourages compliance by providing guidance before imposing penalties. Accordingly, Inspector-cum-Facilitators also advise employers. Section 54 prescribes the following penalties for wage violations:
- Payment of an amount less than the amount due: A fine of up to ₹50,000 may be imposed.
- Repeat offense within 5 years: Imprisonment of up to 3 months, a fine of up to ₹1,00,000, or both may be imposed.
- Other contraventions: A fine of up to ₹20,000 may be imposed.
- Failure to maintain records: A fine of up to ₹10,000 may be imposed.
Additionally, Section 56 allows you to compound a first offense that carries only a fine at 50% of the maximum fine. Under Section 45(2), the authority can also award compensation of up to ten times the claim.
Employer Compliance Checklist for 2026
As an employer, you need to complete these eight steps to meet the statutory requirements for equal pay compliance.
- Identify whether the Central or State Government acts as the appropriate government for your establishment.
- Categorize roles based on skill, effort, experience, responsibility, and working conditions.
- Audit wage structures across genders within each group to ensure internal pay equity.
- Include conveyance allowance, HRA, and overtime in this comparison.
- Adjust lower wage tiers upward where unjustified gender-based disparities exist.
- Record the reason, such as seniority, for any remaining difference.
- Maintain Forms I, IV, and IX, and keep them for 5 years.
- Issue wage slips in Form V and display the notice required under the Code.
Incorporating these steps into the annual payroll compliance review helps employers detect and correct pay gaps early.
Conclusion
The Equal Remuneration Act, 1976 marked India’s statutory commitment to equal pay, and the Code on Wages now takes it further by covering all genders. As States notify their own wage rules, pay audits are likely to become a routine part of compliance. Employers who document the reason for each pay difference today will be better prepared for those reviews. An automated payroll solution makes these wage records easier to maintain and retrieve.
Suggested Reading
Frequently Asked Questions
Is the Equal Remuneration Act, 1976 Still in Force?
No, the Equal Remuneration Act, 1976 is no longer in force. Section 69 of the Code on Wages, 2019, was repealed on 21 November 2025. Today, Sections 3 and 4 of the Code cover equal pay for the same or similar work.
What does “Same Work or Work of a Similar Nature” Mean?
It means work that needs the same skill, effort, experience, and responsibility under similar working conditions. Minor differences not of practical consequence do not constitute a valid basis for wage differentiation between genders.
What were the Penalties under the Equal Remuneration Act, 1976?
For the first offense of unequal pay, the fine was ₹10,000 to ₹20,000. The employer could also face imprisonment of 3 months to one year. For a repeat offense, the punishment was imprisonment of up to 2 years.
What is the Penalty for Unequal Pay under the Code on Wages?
If you pay less than the amount due, you face a fine of up to ₹50,000. If you repeat the offense within 5 years, you face imprisonment of up to 3 months, a fine of up to ₹1,00,000, or both.
Does the Equal Pay Rule Apply to Small Businesses?
Yes, it applies to small businesses as well. Neither the Act nor Section 3 of the Code has a minimum employee limit for equal pay.
How Long does an Employee have to File a Claim?
An employee has 3 years to file a claim under Section 45(6) of the Code. The adjudicating authority has the discretion to admit condoned claims filed beyond the 3-year limitation period on the ground of sufficient cause.
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