Delhi High Court: No Imprisonment-Based Offence Compounding Under Code on Wages 2019

• The Ministry of Labour and Employment issued a revised notification on August 19, 2026, clarifying the scope of offence compounding under the Code on Wages, 2019.
• Deputy Chief Labour Commissioners and other designated officers can now compound certain offences only where the offence is not punishable with imprisonment alone or with imprisonment and fine.
• The revised notification excludes offences carrying imprisonment as a punishment from compounding.
• Lawyers must advise their clients accordingly, ensuring they understand which officers can compound certain offences and under what conditions.

The revision clarifies that Deputy Chief Labour Commissioners and other designated officers can compound offences under the Code on Wages, 2019 only where the offence is not punishable with imprisonment alone or with imprisonment and fine.

The Ministry of Labour and Employment issued a revised notification on August 19, 2026, clarifying the scope of offence compounding under the Code on Wages, 2019. The revision limits compounding to offences that are not punishable with imprisonment alone or with imprisonment and fine. This change affects the powers of Deputy Chief Labour Commissioners and other designated officers, who can now compound certain offences only within this revised framework.

The revised notification supersedes an earlier one dated May 12, 2026, which had authorised designated officers to compound offences punishable with imprisonment only or with imprisonment and fine. However, the new framework excludes offences carrying imprisonment as a punishment from compounding.

The Code on Wages, 2019, governs labour laws in India, and Section 56 of the code empowers designated officers to compound certain offences. The revised notification clarifies that Deputy Chief Labour Commissioners and other designated officers can only compound offences under this section where the offence is not punishable with imprisonment alone or with imprisonment and fine. This distinction highlights the importance of understanding the specific conditions for compounding, as it affects the scope of powers granted to these officers.

The revision also underscores the need for lawyers to be aware of the revised framework's impact on their clients' compliance with the Code on Wages, 2019. With the exclusion of offences carrying imprisonment from compounding, lawyers must advise their clients accordingly, ensuring they understand which officers can compound certain offences and under what conditions.

The revised notification has significant implications for labour law compliance in India. The clarification on the scope of offence compounding will affect businesses and individuals alike, as they must now navigate the revised framework to ensure compliance with the Code on Wages, 2019. Lawyers play a crucial role in advising their clients on the practical implications of this revision, particularly regarding which officers can compound certain offences and under what conditions.

The revised notification also underscores the importance of understanding the nuances of labour law in India. As the government continues to revise and update labour laws, it is essential for lawyers, businesses, and individuals to stay informed about these changes to ensure compliance and avoid potential penalties.

Lawyers should watch for the revised framework's impact on their clients' compliance with the Code on Wages, 2019, particularly regarding which officers can compound certain offences and under what conditions.

Source: Original reporting via Ministry of Labour and Employment notification