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Minimum Wages Act, 1948
Over the years, in a country like India, except certain
highly organized industries, the labour as a whole was
not able to put a face of collective bargaining and look
after their own interests. Thus, Minimum Wages Act,
1948 was enacted in the country with the OBJECTIVE:

ØTo provide minimum wages to the workers working in

organized sector(scheduled employment)
ØTo stop exploitation of the workers
ØTo empower the government to take steps for fixing
minimum wages and to revise this wages within a
period of five years.
ØTo provide for appointment of Advisory Committees &
Advisory Boards, having equal representatives of
employers and workers. 3
Applicability of the Act
• The Act extends to whole of India.
• To any employment in any State if it employs
1000 employees.
• The Act will not apply to employees in any
undertaking owned by the Central Govt. or
of Federal railway, except with the consent
of the Central Govt.
Thus, the wages have to be statutorily paid.

Who is an employee?
• EMPLOYEE is anyone
 (1) Employed for Hire or Reward
 (2) To do skilled or unskilled work
 (3) Manual or Clerical
 (4) Job Worker
 (5) Any person declared by the appropriate
 Government as Employee but, does not
 any member of armed forces
What is wages?
section 2(h)
• Wages means all remuneration capable of being
expressed in terms of money. It includes house
rent allowance but does not include
 value of house accommodation, supply of light,
water, medical attendance
 Value of any other amenity provided, if excluded
by Government order
 Contribution to pension fund or provident fund or
 Traveling allowance
 special expenses incurred by
 the nature of employment
 Gratuity payable on discharge.
• 6
Minimum wage fixation (section 3)
1. The appropriate government shall fix and revise
the minimum wages payable to employees
employed in an employment specified in part
I & II of the Schedule.

 2.The rate can be fixed on

a. time work basis
b.piece work basis
c. guaranteed rate basis
 when rate is fixed on piece work basis and
d. overtime rate basis.

 3. Different minimum wage rates can be fixed for
• different scheduled employments
• different class of work in the same scheduled
• adults, adolescents, children
 and apprentices
• Different localities.

4. Minimum rates can be fixed on basis of hour, day

or month, or even longer period.
BASIS: the fixation of minimum wages depends on various

factors like Socio-economic and agro-climatic conditions,

prices of essential commodities, paying capacity and the
local factors influencing the wage rate.

Minimum Rate of wages (section 4)
Any minimum rate of wages fixed or revised by the
appropriate govt. may consist of,
• a basic rate of wages and a special allowance at a
rate to be adjusted at such intervals and in such
a manner as the govt. may direct OR
• A basic rate of wages with or without allowance
for cost of living allowance based on cost of
living index number. OR
• An all inclusive rate allowing for basic wage, cost
of living allowance and
 cash value of concession,
 if any

Procedure for fixation of min wages(sec.5)
1. Committee method : a committee is appointed to
hold enquiry and suggest minimum wages to
be fixed.
2. Notification Method : notification is published in
the official gazette and 2 months period is
given to different parties to suggest their case.
Based on the representations, the govt. will fix
the minimum wages. The
 notification can apply
 from retrospective effect
 also.

Advisory board…
Government is required to constitute Advisory

Board to recommend minimum wages. The

recommendations of Advisory Board are not
binding on Government.

Central Advisory Board…
• is constituted from persons nominated by central
•And consist of representatives of employers,
employees and independent members (up to 1/3rd
of the total strength).

Can you pay wages in kind?
• Sec. 11 of Min. Wages Act says that you can
only make the payment in cash.
• If it is a custom to make payment wholly or
partly in kind, the appropriate govt. may
permit it.
• It may by notification in
 the Official gazette, authorize
 the provision of essential
 commodities at
 concessional rates.

Are working hours fixed?
• Sec. 13: the govt. may fix the hours of work. It
may provide for rest day and interval also.
• Will there be overtime?
• •Sec. 14: if minimum wages is fixed by hours,
then the workers will be paid overtime if he
works more than the hours prescribed. The
overtime rate will be as fixed in this law or
other law as applicable.

if a worker works less than normal hours

•He will receive minimum wages
•However, he will not receive minimum wages
if he is not willing to work or circumstances
as may be prescribed. 13
Employer to close the unit, if
minimum wages cannot be paid…
Ø If employer cannot pay minimum wages, he has to close
down the undertaking. Paying capacity is not relevant
consideration for rate of minimum wages.
 Deepak Photos v. State of Kerala 2001
Ø•Minimum wages are payable irrespective of financial
• position of individual employer Hindustan Aeronautics
v. Workmen AIR 1967

If you pay more than minimum
wages – fair ….
• Even if State Government notification prescribes variable
dearness allowance which is linked with cost of living
index, amount paid on basis of DA is not to be taken as
an independent component of minimum wages, but as
part and parcel of process of computing minimum
wages. Hence, in cases where employer is paying total
sum which is higher than minimum rates of wages fixed
under the Act including the cost of living index (VDA), he
is not required to pay VDA separately.
 Harilal Jechand Doshi v. Maharashtra General Kamgar Union

Some interesting facts
• There are 45 scheduled employments in Central sphere
and 1222 employments in State sphere.
• It includes workers employed in unskilled, semi-skilled
and skilled sectors like shawl & carpet weaving,
different mines, construction or maintenance of roads,
agriculture or in conjunction with farm operations,
industries and factories etc. as specified in Schedule I
of the Act.
• Due to widespread disparity in the minimum wages
throughout the country The National Floor Level
Minimum Wage is fixed at Rs 80 per day
 by the govt.

Minimum wages in Delhi (per day)

• Skilled Rs. 142.10

• Semi-skilled Rs. 132.20

• Unskilled Rs. 125.80
In Australia its 543.78 Australian dollars per week;
Denmark- none, nationally; instead, negotiated

between unions and employer associations;

100.65 kroner, according to the terms of the
country's largest collective bargaining agreement,
negotiated in the spring of 2008 and covering
almost the entire industrial sector

NEPAL- 4,600 Nepalese rupeesa month for unskilled
labor (3,050 rupees as a basic salary, and 1,550 rupees
as an allowance); 4,650 NRS for semi-skilled labor; 4,760
NRS for skilled labor; 4,950 NRS for highly skilled labor
PAKISTAN- 6,000 Pakistani rupees per month, applying

only to industrial and commercial establishments

employing 50 or more workers
THAILAND-ranges from 148 Thai baht to 203 baht per day,

depending on the cost of living in various provinces; set

by provincial tripartite wage committees that sometimes
include only employer representatives
UNITED KINGDOM- £ 5.80 per hour (aged 22 and older),

£4.83 per hour (aged 18-21) or £3.57 per hour (under 18

and finished compulsory education)
USA-the federal minimum wage is US$7.25 per hour;
states may also set a minimum, in which case the higher
of the two is controlling
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