3. BACKGROUND
1920: Mr. K.G.R. Choudhary recommended setting up boards for determining minimum wages
for each industry.
1928: International Labour Conference implemented system to fix wages for different trades.
However, the practice was not put into legislation in India.
1943: Standing Labour Committee, a Labour Investigation Committee was appointed on the
recommendation of Indian Labour Conference (ILC), 1943 to look into conditions of labour in
terms of their wages, housing, social conditions, and employment.
1945: The first bill on minimum wages was drafted in ILC.
1946: A bill on minimum wages was introduced in Central Legislative assembly on the
recommendations of 8th Standing Labour Committee. The 8th meeting of the Standing Labour
Committee, 1946 also recommended that a separate legislation that specified working hours,
minimum wages and paid holidays of unorganized sector be enacted.
1947: Post-independence representatives of labour, employers, and government attended a
government-organized conference. They defined minimum wages to be such that they should
not only provide for subsistence but should also be enough for education, medical
requirements and other amenities and should sustain efficiency.
1948: The Minimum Wages Act was eventually passed and was effective from 15 March. Under
the act a tripartite committee "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 definition of 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".
Recommendations of this committee have now set the foundations of wage fixation.
4. INTRODUCTION
[SEC 3]: THE ACT LAYS DOWN THE PRINCIPLE FOR FIXATION OF
o A MINIMUM TIME RATE OF WAGES
o A MINIMUM PIECE RATE
o A GAURANTEED TIME RATE
o AN OVERTIME RATE FOR DIFFERENT OCCUPATIONS, LOCALITIES OR CLASSES
OF WORK AND FOR ADULTS, ADOLESCENTS, CHILDREN, AND APPRENTICES.
[SEC 4]: THE MINIMUM WAGES MAY CONSIST OF
o A BASIC RATE OF WAGES AND A COST OF LIVING OF ALLOWANCES
o A BASIC RATE OF WAGES WITH OR WITHOUT THE COST OF LIVING
ALLOWANCE AND THE CAST VALUE OF THE CONCESSIONS IN RESPECT OF
ESSENTIAL COMMODITIES SUPPLIED AT CONCESSIONAL RATES.
5. OBJECT OF THE ACT
TO PROVIDE MINIMUM WAGES TO THE WORKERS WORKING IN ORGANISED SECTOR.
TO STOP EXPLOITATION OF THE WORKERS.
TO EMPOWER THE GOVERNMENT TO TAKE STEPS FOR FIXING MINIMUM WAGES AND
TO REVISE THIS WAGES EVERY TWO YEARS.
TO APPLY THIS LAW ON MOSTOF THE SECTORS IN ORGANISED SECTOR (SCHEDULED
EMPLOYMENT
TO PROVIDE PROTECTION TO WORKERS IN EMPLOYMENTS IN WHICH THEY ARE
VULNERABLE TO WHERE SWEATED LABOUR IS MOST PREVALENT.
6. APPLICABILITY
THE ACT EXTENDS TO THE WHOLE OF INDIA.
IN MAHARASHTRA, THE PROVISIONS OF THE ACT HAVE BEEN EXTENDED TO
ALL SHOPS AND COMMERCIAL ESTABLISHMENTS COVERED UNDER THE
BOMBAY SHOPS AND ESTABLISHMENTS ACT, 1948.
THE CONTRACT LABOUR, FALLING WITHIN THE PURVIEW OF THE CONTRACT
LABOUR ( REGULATION AND ABOLITION) ACT, 1970, HAS TO BE PAID
MINIMUM WAGES UNDER THE MINIMUM WAGES ACT.
IN SHORT THOSE WHO ARE ELIGIBLE ARE,
i. PERMANENT EMPLOYEES
ii. CONTRACT EMPLOYEES
iii. CASUAL WORKERS
iv. PEOPLE ON PROBATION GET FIXED PAY INSTEAD OF MINIMUM WAGES.
v. TRAINEES GET STIPEND AND NOT MINIMUM WAGES.
7. DEFINITIONS
APPROPRIATE GOVERNMENT: IN THIS ACT, THE TERM ‘APPROPRIATE
GOVERNMENT’ MEANS
CENTRAL GOVERNMENT- FOR ANY SCHEDULED EMPLOYMENT CARRIED ON
UNDER THE AUTHORITY OF CENTRAL GOVERNMENT OR RAILWAY
ADMINISTRATIONS AND FOR A MINE, OILFIELD OR MAJOR PORT OR ANY
CORPORATION ESTABLISHED BY A CENTRAL ACT.
STATE GOVERNMENT- FOR ANY OTHER SCHEDULED EMPLOYMENT CARRIED
ON WITHIN ITS TERRITORY.
WAGES: MEANS ALL REMUNERATION CAPABLE OF BEING EXPRESSED IN
TERMS OF MONEY, WHICH WOULD BE PAYABE TO A PERSON EMPLOYED IN
RESPECT OF HIS EMPLOYMENT OR OF WORK DONE IN SUCH EMPLOYMENT,
AND INCLUDES HOUSE RENT ALLOWANCE.
8. EMPLOYER:
i. THE TERM ‘EMPLOYER’ MEANS ANY PERSON EHO EMPLOYS ONE OR
MORE EMPLOYEES IN ANY SCHEDULED EMPLOYMENT IN RESPECT OF
WHICH MINIMUM RATE WAGES HAVE BEEN FIXED UNDER THE ACT
ii. IT ALSO INCLUDES MANGER OF A FACTORY AS DEFINED UNDER THE
FACTORIES ACT, 1948
iii. HEAD OF DEPARTMENT APPOINTED FOR THE SUPERVISION AND
CONTROL OF EMPLOYEES IS CARRIED ON UNDER CENTRAL
GOVERNMENT OR A LOCAL AUTHORITY.
iv. IN ANY OTHER CASE THE PERSON RESPONSIBLE FOR SUPERVISION,
CONTROL OR PAYMENT OF WAGES.
9. EMPLOYEE:
i. THE TERM ‘EMPLOYEE’ MEANS ANY PERSON WHO IS EMPLOYED TO
DO ANY WORK, SKILLED OR UNSKILLED, MANUAL OR CLERICAL, IN A
SCHEDULED EMPLOYMENT.
ii. ALSO INCLUDES OUT-WORKERS TO WHOM MATERIALS ARE GIVEN
FOR PROCESSING AT PREMISES
iii. DOES NOT INCLUDE ANY MEMBER OF THE ARMED FORCES OF THE
UNION.
10. Fixation & Revision of Minimum Wages
Sec. 3 (1 – A) - The appropriate government may refrain
from fixing the minimum rates of wages fixed by it, in
respect of any scheduled employment in which these are,
in the whole state, less than one thousand employees
engaged in such employment.
11. Minimum Rates [Sec. 3 (2)]
The appropriate government may fix :
a) A min rate of wages for time work (referred to as ‘min time rate’)
b) A min rate of wages for Piece work (referred to as ‘min piece rate’)
c) A min rate of remuneration to apply in the case of such employees
employed on piece work for the purpose of securing to such
employees a min rate of wages on a time work basis ( referred to as
‘guaranteed time rate’)
d) A min rate ( whether a time rate or a piece rate) to apply in
substitution for the min rate which would otherwise be applicable,
in respect of overtime work done by employers (referred to as
‘overtime rate’)
12. Different Minimum Rates (Sec 3(3))
In fixing or revising min rates of wages;
a) Diff min rates of wages may be fixed for-
i. Diff scheduled employment;
ii. Diff classes of work in the same scheduled employment;
iii. Adults, adolescents, children and apprentices;
iv. Diff Localities
b) Min rates of wages may be fixed for any one or more of the following
wage periods namely-
i. By the hour
ii. By the day
iii. By the month
iv. By such other larger wage periods as may be prescribed
13. Minimum rates of wages (sec.4)
1. Basic + Special Allowance (Which varies with the cost of living index).
2. Basic + Cash value of concessional supply of materials like food, clothes,
etc.
3. An all inclusive rate which includes Basic + Cost of living Allowance +
Cash value of concessional supply of materials.
Procedure for fixation and revision of minimum rates of wages (sec.5)
1. Publish its proposals in the official gazette asking comments from the
affected parties.
2. Constitute committees/sub committees for the purpose.
3. The committees/sub-committees and advisory boards constituted by the
Government consist of equal number of members of :
Employers
Employees, and
Independent persons
14. Wages in kind (sec.11)…
• Minimum wages under this Act must be paid in cash. but this section
authorized the payment of minimum wages in kind.
• Custom to pay wages wholly or partly in kind.
• Authorization must be made by notification in the Official Gazette.
• Provision of essential commodities at concessional rates.
Payment of Minimum Rates of Wages (sec 12)…
• This section provides that where minimum wages have been in force in
any scheduled employment, the employer shall pay wages to every
employee engaged in such employment at a rate not less than the
minimum rate of wages fixed under (sec. 5).
• The wages shall be paid to him without deduction of any kind.
15. Wages for overtime (sec14)
When workers works for more then nine hrs. or for 48 hrs. in any week .
Wages for less than the normal working day (sec15)
Where his failure of work is caused by his unwillingness to work & not by
omission of the employer .
Wages for two or more classes of work (sec16)
Where to each employee a different minimum rate of wages is applicable
Minimum time rate wages for piece work (sec17)
Employer shall pay to such an employee wages at not less than the minimum
time rate .
Maintenance of registers & records (sec18)
• Registers shall give particulars of employees by him.
• Work performed by them .
• Overtime work
• Gross wages ,deductions made etc.
16. RECORDS TO BE MAINTAINED- SEC. 18
• Employer should maintain a Register of Employees containing the details
such as the name, address, father’s name, age, sex, the work performed,
the wages paid to them.
• Every Employer should display the above particulars in the premises where
the Employee works.
• The other Registers to be maintained are:
i. Register of Fines.
ii. Register of Deductions for Damage / Loss caused to the employer, by
the neglect / default of the employed persons.
iii. Overtime Register for Workers
iv. Muster-Roll
• The Registers shall be preserved for a period of 3 years after the date of
last entry made
17. Every employer is required to:
i. Put up a notice containing the minimum rates of wages fixed & keep it
clean & legible condition.
ii. Exhibit an extract of the Act, the Rules made there under with the
name and address of the inspector shall be displayed in English and in a
language understood by the majority of the workers.
iii. Give annual returns in to the labour commissioner, and Exhibit a notice
in the public motor vehicles in case of employment in public motor
transport
18. ENFORCEMENT SEC.19
• The Appropriate Government appoint inspectors to enforce Act.
• All the officers of labour dept. notified.
• The inspectors have right
i. to enter the premises of employers at all reasonable hours.
ii. to verify all the records as required to be maintained by law.
iii. to examine any persons they find in the premises.
iv. to enquire about the work given to workers and.
v. to get information from the employers about the payment of wages,
etc.,
vi. to cease or take copies of registers.
• The Inspector shall be deemed to be a Public Servant.
19. AUTHORITIES UNDER THE ACT
Commissioner for workmen’s compensation
Exercising functions as a Labour Commissioner
Rank of Labour Commissioner
Experience & Stipendiary magistrate
Malicious or Vexatious Application
If the Authority hearing an application is satisfied that it was malicious or
vexatious, it may direct that a penalty not exceeding Rs. 50 be paid to the
employer by the person presenting the application.
21. OFFENCES BY COMPANIES.
If the person committing any offence under this Act is a company, every
person who at the time the offence was committed, was in charge of, and
was responsible to, the company for the conduct of the business of the
company as well as the company shall be deemed to be guilty of the offence
and shall be liable to be proceeded against and punished accordingly:
Cognizance of offences.-
No Court shall take cognizance of a complaint against any person for an
offence-- (a) under clause (a) of section 22 unless an application in respect
of the facts constituting such offence has been presented under section 20
and has been granted wholly or in part, and the appropriate Government or
an officer
22. Offence Punishment
Payments of less than minimum
wages of employee
Imprisonment which may extend up
to 5 Years or fine which may extend
up to Rs 10,000/- or both
PENALTIES:
i. pays to any employee less than the minimum rates of wages
fixed for that employee's class of work, or less than the amount
due to him under the provisions of this Act, or
ii. (b) contravenes any rule or order made under (Sec.22),
23. EMPLOYERS' OBLIGATIONS
i. As an employer you are responsible for worker's compensation insurance
cover to protect your employees. This insurance is compulsory. You might
also have to extend to cover to include sub-contractors working for you.
ii. The employer may make a deduction out of wages as may be authorized.
iii. The employer shall not make deduction from wages except those
authorized by or under the rules.
iv. The employer shall pay over time at double ordinary rate of wages.
v. Every employer shall issue wage slips in form of describe containing.
vi. The employer authenticate the entries in the wage book or wage slip.
vii. The employer shall allow a rest day with wages to the employees every
week which ordinarily should be Sunday or any other day
24. LET US SUM UP
The minimum wages act aims to extend the concept of social
justice to the employees employed in certain scheduled
employments including agriculture.
The act ensures protection to workers in employments in which
they are vulnerable to exploitation on account of lack of
organization and bargaining power and where sweated labour is
most prevalent.
The act provides for statutory fixation and revision of minimum
rates of wages by the central or state governments within a
specified period.
While fixing or revising minimum wages, the appropriate
government may follow either the committee method or
notification method.
The employer is bound to pay minimum rates of wages fixed by the
government to every employee covered under the scheduled
employment.
25. CONTD….
The appropriate government may appoint an authority for a
specified area to hear and decide claims arising out of payment of
wages at less than the minimum rates of wages and other
incidental matters.
The act is administered both by the central and state government.