Basic Of Minimum Wages Act,1948

1. The Minimum Wages
Act,1948
By:
Rupal Lala

2. What is Minimum Wages Act,1948 ?
The Minimum Wages Act is an act of Parliament concerning
Indian Labor Law that sets the minimum wages that must be
paid to skilled and unskilled labors.
According to Indian Constitution:
“Living Wage that is the level of income for a worker which
will ensure basic standard of living including good health,
dignity, comfort, education and provide for any contingency.”
According to Investopedia:
“A minimum wage is a legally mandated price floor on hourly
wages, below which workers will neither be offered job and
nor they will accept the job.”

3. Pre Independence
 1920: K.G.R. Choudhary recommended setting up boards for determining
minimum wages for each industry.
 1943: Standing Labor Committee, a Labor Investigation Committee was
appointed on the recommendation of Indian Labor Conference (ILC), 1943
to look into conditions of labor in terms of their wages, housing, social
conditions, and employment.
 1946: A bill on minimum wages was introduced in Central Legislative
assembly on the recommendations of 8th Standing Labor Committee. The
8th meeting of the Standing Labor Committee, also recommended that a
separate legislation that specifies working hours, minimum wages and paid
holidays of unorganized sector be enacted.

4. Post Independence
 1948: The Minimum Wages Act was eventually passed and was effective from 15
March. Under the act "The Tripartite Committee of Fair Wage was appointed that
set definitions and guidelines for formulating a wage structure in India.
The Committee of Fair Wage defined Minimum Wage as:
"The minimum wages must be provided not merely for the bare subsistence of life but
also for the preservation of efficiency of the workers by providing for some measures
of education, medical requirement and amenities".
 1957: The 15th Labor conference added some norms in the fixation of minimum
wages such that revision and fixation of wage rates are need-based. The
recommendations were:
1. The cost of three consumption units- Husband, Wife and Two(2) Children for one
earner. Income from women and Children should be ignored.
2. Satisfy the minimum food requirement of 2700 Calories per Person(CPP).
3. Clothing requirement of 72 yards for a family annually.
4. Rent of the minimum area as specified by Government’s Industrial Housing
Scheme.
5. 20% of minimum wage should be the cost of Fuel and Miscellaneous items of
expenditure.

5.  1987: Parliamentary sub-committee on unorganized labor concluded that minimum wages fail to
ensure a livelihood above the government defined poverty line for the unorganized sector. It also
revealed some flaws in implementation of the act. The committee noted that wages are not fixed
or revised regularly in some states. The committee recommended that factors such as Nutrition
Requirements, Poverty Line, Shelter, Clothing, Fuel, Light, Medical and Educational Expenses
should be taken into account while fixing and revising minimum wages.
 1991:National Commission on Rural Labor (NCRL) recommended the government to introduce
a national minimum wage floor level for uniformity. VDA(Variable Dearness Allowances)
became effective. It is revised twice in a year, on 1 April and 1 October.
 1994: The 9th Centre of Indian Trade Unions conference along with insisting a minimum wage
floor of Rs. 78.50, raised the following demands:
• The family should be taken as five units instead of three.
• The Minimum Wages Act should cover all employments.
• There should be full neutralization of cost of living with automatic linkage with the consumer
prices index and revision after every six months or 50-point rise in the CPI, whichever is earlier.
 1996: Government fixed the national minimum wage floor at INR 35/day as per the
recommendations of NCRL.
 2007: The Indian National Trade Union Congress appeals for a "national decent minimum
wage" for all industries that would be based on workers' needs.

6.  2008: Working Women in Houses Union marched in Salem demanding statutory fixation of
minimum wages for house maids and servants.
 2009: The Central government de-linked (MGNREGA) wage rates from minimum wages
through notification under Section 6(1). Wage rates that were initially aligned with respective
states' minimum wages were now fixed at a uniform wage rate of INR 100 under the
scheme.
 2010: Andhra Pradesh’s government says that any payment including that under the
MGNREGA scheme, below minimum wage rate is unconstitutional.
 2010: Andhra Pradesh’s government says that any payment including that under the
MGNREGA scheme, below minimum wage rate is unconstitutional.
 2012: The Labor Department decides to make revisions in minimum wage rates mandatory
within 3 years.
 2015: From July 1, 2015 the National Floor Level of Minimum Wage was raised to Rs 160 per
day. On September 1, 2015 laborers in unorganized sector extended their support to one-day
nationwide general strike. Later than Shri Bandaru Dattatreya, the Minister of State(IC) for
Labor and Employment, elaborated on the initiatives and continuing efforts of the Government
to address the issues and concerns of the Trade Unions for the welfare of workers. If the norms
are implemented then the minimum wage would be not less than Rs 273 per day which is
currently Rs 160 per day.

7. Objective of The Act
 Fixing a minimum rate of wages in number of industries where the labors
are not organized and sweated labors are most dominant. The Act aims at
preventing the exploitation of workers or labors in industries, for which,
the appropriate Government is empowered to take steps to prescribe
minimum rates of wages.
 ILO referred it as remuneration of workers in those industries where the,
level of wages was substantially low and the labor was vulnerable to
exploitation, being not well organized and having less effective
bargaining power.
 The Act enables the Central and State Government to fix minimum rates
of wages payable to employees in selected number of Sweated industries.
The Act extends to the whole of India.

8. Who all are Eligible?
 Part-time Workers.
 Casual Laborers.
 Agency Workers.
 Workers and Homeworkers paid by the number of items they make.
 Apprentices.
 Trainees, Workers on Probation.
 Disabled Workers.
 Agricultural Workers.
 Foreign workers.
 Seafarers.
 Offshore workers.

9. Fixation and Revision of Wages
(The fixation and revision of wages falls under the Sec 3,Sec 4 &Sec 5. )
 [Sec 3]:
“Deals with, the appropriate Government Fix the
Minimum Wages that is payable to the employees in any
Scheduled Employment.”
 [Sec 4]:
“Describes on the Contents of Minimum Wages.”
 [Sec 5]:
“Lays down the Procedure for Fixing and Revising the
Minimum Rates of Wages.”

10. [Section 3]
“Fixing of Minimum Wages Rate”
The appropriate government :-
 Shall fix the Minimum Rate of Wages payable to the employees
Employed in the Employment specified in Part I or Part II of the
Schedule and in an Employment to either by notification in Official
Gazette.
 The employees Employed in the Employment specified in Part II of the
schedule, Fix the Minimum Rate of Wage for apart of the State or for
any Specified Class, instead of Fixing the Minimum Rate of Wages for
the Whole State.
 Shall Review the Minimum Rate of Wages so Fixed and Revise the
same , at such intervals not exceeding 5 years.

11.  Minimum Rates:
The Appropriate Government may fix:
1. Minimum Rate of Wages for Time Work OR
Minimum Time Rate.
2. Minimum Rate of Wages for Piece Work OR
Minimum Piece Rate.
3. Minimum rate of remuneration to apply in the case of Employees
Employed on Piece Work, for the purpose of securing to such employees
a Minimum Rate of Wages on a Time Work Basis OR Guaranteed Time
Rate.
4. Minimum rate (whether Time Rate or Piece Rate) to apply in
substitution for the Minimum Rate which would otherwise be applicable
in respect of Overtime Work done by Employees OR Over Time Rate.

12.  Different Minimum Rates:
The different minimum rates of wages may be fixed for:-
1. Different Scheduled Employments.
2. Different Classes of Work in the Scheduled Employment.
3. Adults, Adolescents, Children and Apprentice.

13. [Section 4]
“Content of Minimum Rate of Wages”
The Appropriate Governments Fix or Revise Minimum Rate of Wages may
consists of-
1. A Basic Rate of Wages and Special Allowance.
2. A Basic Rate of Wages with or without the cost of Living Allowance.
3. An all Inclusive Rate allowing for the Basic Rate, the Cost of Living
Allowance and the Cash value of the Concessions

14. [Section 5]
“Procedure for Fixing and Revising Minimum Wages”
There are Two separate Modes of Procedure for Fixing and Revising
Minimum Wages under [Sec 5].The main Object of both the procedures is to
Enable the Government to reach a Balanced Conclusion with regard to
Fixation of a Minimum Wage.
The Two Modes are as follows:
1. Mode One { Appointment of Committee }
The Appropriate Government should appoint as many Committees or Sub-
Committees as to hold necessary inquires for Fixation of Minimum Rates of
Wages.
b. Mode Two {Publication of Proposals in the Official Gazette }
The Appropriate Government shall by Notification in the Official Gazette,
publish its Proposals for the Information of the Person who is likely to be
Affected by the Fixation of Minimum Rates of Wages.

15. Safeguard Payments of Minimum Wages
 Wages in Kind [Sec 11]:
The Minimum Wages under the Act shall be paid in cash. But where it has
been Custom to Pay Wages Wholly or Partly in Kind, the Appropriate
Government may, by notification in the Official Gazette, authorize the
Payment of Minimum Wages either Partly or Wholly in Kind. The Cash Value
of Wages in Kind and of Concessions in respect of supplies of any essential
Commodities at Concessional Rates shall be Estimated in the prescribed
manner.
 Payment of Minimum Rate of Wages [Sec 12]:
In respect of any Scheduled Employment where Minimum Wages have been
Fixed, the employer shall Pay Each and Every Employee Wages at a Rate Not
Less than the Minimum Rate of Wages Fixed for that Class of Employees.
The wages shall be paid without any Deductions except as prescribed.

16.  Fixing Hours for a Normal Working Day [Sec 13]:
In respect of any Scheduled Employment where Minimum Wages have been
Fixed, the Appropriate Government may:
1. Fix the Numbers of Hour of Work which is the normal working day
Inclusive of One or More intervals.
2. Provide a Day of Rest in every period of 7 days and for Payment of
Remuneration in respect of such Day of Rest.
3. Provide for Payment for Work on a Day of Rest at a Rate Not Less than
the Overtime Rate.
 Rates of Overtime [sec 14]:
Where Employee, whose Minimum Rate of Wages is fixed under this Act, by
the Hour, by the Day or by any Longer Wage-Period as prescribed, Works
Overtime, the Employer shall Pay him for Every Hour or for Part of an Hour
so worked in Excess, Wages at the Rates Fixed for Overtime Work under the
Act or under any Law of the Appropriate Government in force, whichever is
higher.

17.  Wages of Worker who works for Less than the Normal Working Day
[Sec 15]:
Sometime it may happen that any Employee whose Minimum Rate of
Wages has been Fixed by the Day may work on any Day on which he has
employed the period less than the required number of Hours constituting a
normal working day. In that case he is entitled to Receive Wages for the
work done by him on that day, If he had worked on a Full normal working
day except:
1. If his failure of work is Caused by his Unwillingness to Work and not by
Omission of the Employer to Provide him with Work.
2. In such other Cases and Circumstances as may be prescribed.
 Wages for 2 or More Classes of Work [Sec. 16]:
Where an Employee does 2 or More Classes of Work to each of which a
different Minimum Rate of Wages is applicable, the Employer shall pay to
such employee in respect of the Time respectively occupied in each such
class of work, wages at Not Less than the Minimum Rate in force in respect
of each such class.

18.  Minimum Time Rate Wages for Piece Work [Sec. 17]:
Where an Employee is Employed on Piece Work for which Minimum Time
Rate and not a Minimum Piece Rate has been fixed under the Act, the
Employer shall pay such employee Wages at not Less than the Minimum
Time Rate.
 Maintenance of Registers and Records [Sec 18]:
In an Organization who falls under this Act shall maintain Registers and
Records giving the detail Information of the Employees, the Work Performed
by them, the Wages Paid to them and such other Particulars and in such form
as may be Prescribed.

19. Conclusion
The main Objective of the Minimum Wages Act 1948, is Fixing a
Minimum Rate of Wages in number of Industries where the
Labors are Not Organized and Sweated Labors are most
Dominant.