Minimum Wage Legislation

Prepared by: Himanshu Soni Hardik Trivedi Rushank Shah Smital Solanki

Rahul Shah
Jasu Sangad

Objective of State Regulation of Wages

Prevention of extra hard work and poverty arising from unduly low wages 2. Fixation of just and fair wages for preventing industrial disputes. 3. Control of inflationary pressures 4. Raising purchasing power with a view to speeding up the pace of economic recovery 5. Wage regulation as a part of a nationalincome distribution policy and programmes of planned economic development.
1.

Minimum Wages Act,1948

y It is the first labour legislation in the country

dealing with the fixation of minimum rates of wages for workers employed in different exacting employments including agriculture.

Scope
y The Act empowers the state and the central

governments, to fix minimum rates of wages with respect of workers employed in the following industries or employments listed in the Schedule of the Act, which contains two parts I and II.

y
1.

PART I

Woolen carpet making or shawl weaving establishment 2. Rice mill, flour mill or dal mill 3. Plantation 4. Tobacco 5. Oil mill 6. Local authority 7. Road construction or building operations 8. Stone breaking or stone crushing 9. Lac manufacturing 10. Mica works 11. Public motor transport 12. Tanneries and leather manufacturing

PART II
Agriculture, which includes any form of farming including the cultivation and tillage of the soil, dairy farming, the production, cultivation, growing and harvesting of any agricultural or horticultural commodity, the raising of livestock, bees or poultry, and any practice performed by a farmer or on a farm as incidental to or in conjunction with farm operations .
y

The Act empowers the central and state governments to extend the application of the Act to any employments in their respective jurisdictions where fixation of minimum rates of wages is considered necessary.

Fixation of Minimum Rates of Wages

y The Act empowers the appropriate government in respect of employments in their jurisdictions, to fix minimum rates of wages for time-work or for piecework and also, a minimum rate of remuneration as guaranteed time rate and minimum rate of wages for overtime work. y Different minimum rates of wages may be fixed for different scheduled employments, different classes of work in the same scheduled employment, adults, children and for different localities. And may be fixed by the hour, by the day, or by any prescribed longer wage period.

Any minimum rate of wages fixed or revised by the appropriate government may consist of: (a) a basic wage rate and a cost of living allowance, or (b) a basic rate with or without the cost of living allowance and the cash equivalent of the concession, in respect of supplies of essential commodities, at concession rates, or (C) an all-inclusive rate.

Procedure for Fixing Minimum Rates of Wages

y

a.

b.

In fixing minimum rates of wages in respect of any scheduled employment the appropriate Government shall either appoint as many committees and sub-committees as it considers necessary to hold enquiries and advise it in respect of such fixation, or by notification in the Official Gazette, publish its proposals for the information of persons likely to be affected thereby and specify a date, not less than two months from the date of the notification, on which the proposals will be taken into consideration.

y The appropriate government, after considering all

representations thus received will fix minimum rates if wages in respect of the employment by making notification in the official gazette.

y The minimum rates of wages fixed under either

procedures are to come into force on the expiry of three months from the date of notification, unless the notification specifies a particular date.

Composition of Committees and Sub-committees

y Each of the committees or sub-committees is to consist

of representatives of employers and employees in the scheduled employments in equal number and independent persons not exceeding one-third of the total number.

y One of the independent persons will be appointed as

the chairman.

Advisory Boards
y For co-ordinating the work of committees and subcommittees and advising the government generally in the matter of fixing and revising minimum rates of wages Advisory Boards are appointed. y The Advisory Boards is to consist of equal number of representatives of the employers and employees, and independent persons not exceeding one- third of the total number.

Central Advisory Board

y For the purpose of advising the Central and State Governments and for co-ordinating the work of the Advisory Boards, the Central Government shall appoint a Central Advisory Board. y The Central Advisory Board shall consist of equal representatives of employers and employees and independent persons not exceeding one-third of its total number of members y One of such independent persons shall be appointed the Chairman of the Board by the Central Government.

Revision of Minimum Rates of Wages

y The same procedure as applicable to the fixation of minimum rates of wages is applied to revision of minimum rates of wages.. But where the procedure of notification is adopted, the government is required to consult the Advisory Board too. y The minimum rates of wages are generally to be revised at a maximum interval of five years.

Minimum Rates of Wages during Pendency of Industrial Disputes

During the pendency of the industrial disputes, the rates of wages fixed or revised under the act do not apply in following circumstances:
An industrial dispute relating to the rates of wages payable to any of the employees employed in a scheduled employment, y any proceedings is pending before a tribunal or national tribunal under the Industrial Disputes Act,1947, y before a like authority under any other law y A notification fixing or revising the minimum rates of wages in respect of those employees
y

Mode of Payment
y The Act provides for the payment of fixed minimum wages in cash. However, where the system of wage payment in kind is prevalent, the appropriate government may authorise the payment of wages partly in kind. y Where an employee is required to do two or more classes of work, he is entitled to the minimum rate of wage fixed for each class separately.

Payment of Minimum Rates of Wages and Deductions from Wages

y The employers are required to pay to every employee engaged in a scheduled employment wages at a rate fixed by the government without any deductions except those authorised.

Hours of Work, Overtime and Weekly Rest, and Others

y Appropriate Government is empowered to fix normal

hours of work for a working day, including one or more intervals in respect of the scheduled employments.
y They may also provide for a rest and remuneration

with respect to the day of rest.

Cont

` Above provisions apply only to the prescribed extent

and subject to the prescribed conditions, for the following employees:

o Employees engaged on urgent work o Employees engaged in the nature of preparatory or

complimentary work o Employees whose employment is essentially intermittent o Employees engaged in any work which has to be completed before duty is over o Employees engaged in work which could not be carried on except at times dependent on the irregular actions of the natural forces

Claims
y The Commissioner for Workmen s Compensation or

any officer of the central government exercising functions as a Labour Commissioner for any region, may be appointed an Authority under the Act. y Authority is empowered to hear and decide for any specified area, all claims arising out of payment of less than the minimum rates of wages

y Application has to be made within 6 months from the date on which the payment of the wages was due to be made. y A single application may be made on behalf or in respect of any number of employed persons belonging to the same unpaid group. y Every authority appointed for this purpose has all the powers of a civil court under the Code of Civil Procedure, 1908

Payment of Undisbursed Amounts Due to Employees

y If any amounts payable by an employer as the amount of minimum wages or otherwise due to the employee under the Act could not be paid to him on account of his death before payment or on account of his whereabouts not being known, they are to be deposited with the prescribed Authority which is required to deal with the deposited money in the prescribed manner.

Registers and Records

y Every employer is required to maintain records and

registers containing particulars of employees, work performed by them, wages paid to them, receipts given by them and other prescribed particulars. y Notices containing prescribed particulars have to be exhibited in the factory, workshop or a place where the employees in scheduled employments are employed.

Penalties and Procedure

1.

2.

Payment of less than minimum wages or contravention of any rule or order relating to hours for normal working day is punishable with imprisonment for a term which may extend to 6 months or with fine extending up to Rs.500 or with both. Where the claim by an employee is malicious or vexatious, he may be punished with a fine not exceeding Rs.50 which is payable to the employer.

Power of the Government to Add to the Schedule

y The appropriate government is empowered to add to either part of the schedule any employment in respect of which it is of the opinion that minimum rates of wages should be fixed under the Act. y It is required to notify its intention of doing so in the official gazette at least three months before making addition to the Schedule.

Power of the Central Government to Give Direction

y The central government is empowered to give directions to state governments for carrying into execution of this Act in the states.

Power of the Central and State Governments to Make Rules

y Both the central and state governments are empowered to make rules for carrying out the purposes of the Act subject to the condition of previous publication by notification in the official gazette.