Project on

Procedure for fixing and revising Minimum

Wages
Submitted to,
Mr.Rajnish Jindal
Submitted by,
Vartika Sharma

Course,
BA.LLB (H) 2012-17
A11911111031
Semester-6th ,section C
Amity Law School ,centre II
Amity University Uttar Pradesh,Sector -125,noida

ACKNOWLEDGEMENT

A project report usually falls short of its expectations unless it is guided by

the right people at the right time. I humbly state that this project is not
entirely a work of my own individual effort but a number of people who
have guided me throughout the span of this project. First of all I would like
to acknowledge and express my deep sense of gratitude towards my
subject teacher Mr.Rajnish Jindal , who guided me thoroughly in all the
aspects related to the project.I would also like to thank my friends for cooperating me in preparing this project.

CONTENT
1.
2.
3.
4.
5.

Object and Scope

Main provision under the Minimum wages Act,1948.
Statistics collected under the Minimum wages Act,1948.
Conclusion.
Bibliography .

INTRODUCTION

The minimum wages system serves a useful purpose in preventing human exploitation in
terms of payment of unduly low wage and helps in reducing inequalities in the standard of
living of different social groups of workers by statutorily prescribing minimum wage
rates. The provision of periodic review and revision of minimum wage rates have been
acting as a cushion to workers against price rise and enables them to maintain their standard
of living at a particular level. This helps in reducing poverty and improving the position of
low paid wage earners in sweated unorganised industries.

The fixation of minimum wage is the starting point in the evolution of rational wage
structure. Keeping this in view, the Government of India enacted the Minimum Wages Act,
1948. The Act provides for fixation / periodic revision of minimum wages in employments
where labour is vulnerable to exploitation. Under the Act, the appropriate Government, both
Centre and State can fix / revise the minimum wages in scheduled employments falling in
their respective jurisdiction. It also provides for fixation of hours of work, payment of
overtime wages besides providing penalties for offences under the Act and rules made
thereunder. The statutory minimum wage has the force of law and it becomes obligatory on
the part of the employers not to pay below the prescribed minimum wage to its employees.

OBJECT AND SCOPE

The main objective of this Act, is fixing a minimum rate of wages in number of industries
where the labours are not organized and sweated labours are most dominant. The Act aims at
preventing the exploitation of workers or labours in some industries, for which, the
appropriate Government is empowered to take steps to prescribe minimum rates of wages in
certain

employment.

The Minimum Wages Fixing Machinery convention was held at Geneva in the year 1928 by
ILO with reference to remuneration of workers in those industries where the, level of wages
was substantially low and the labour was vulnerable to exploitation, being not well organised
and

having

less

effective

bargaining

power.

This Act may be called the Minimum Wages Act 1948.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

Main provisions under the Act

(1)

Fixing of minimum rates of wages

(a)

The appropriate Government may fix the minimum rates of wages payable to
employees employed in an employment specified in Part - I or Part - II of the
Schedule and in an employment added to the Schedule. The Government may
review the minimum rates of wages and revise the minimum rates at intervals not
exceeding five years.

(b)

The appropriate Government may fix a minimum rate of wages for time and for
piece rate. However different wage rates may be fixed for different scheduled
employments, different classes of work in the same scheduled employment, for
adults, adolescents, children and apprentices and for different localities and for
any one or more of the wage periods, viz., by the hour or by the day or by the
month or by such larger period.

(2)

Minimum rate of wages

Any minimum rate of wages fixed or revised may consist of
(i)

a basic rate of wages and a special allowance.

(ii)

a basic wage rate with or without cost of living allowances and the cash value
of concessions in respect of supplies of essential commodities at concessional
rates.

(iii)

an all inclusive rate allowing for the basic rate, the cost of living allowance
and the cash value of concessions.

(3) Procedure for fixing and revising minimum wages

The appropriate Government may appoint an advisory Board for advising it,
generally in the matter of fixing and revising minimum rates of wages.
The Central Government may appoint a Central Advisory Board for the
purpose of advising the Central and State Governments in the matters of the fixation
and revision of minimum rates of wages.

The Central Advisory Board may consist of persons to be nominated by the

Central Government representing employers and employees in the scheduled
employments, in equal number and independent persons not exceeding one third of its
total number of members. One of such independent persons would be appointed
chairman of the Board by the Central Government.
(4) Wages in kind
Minimum wages payable under this Act are to be paid in cash. The payment
of minimum wages can be made wholly or partly in kind by notification in the
official Gazette if it is customary to pay wages wholly or partly in kind.
(5) Payment of minimum rate of wages
The employer is required to pay to every employee engaged in a scheduled
employment under him wages at a rate not less than the minimum rate of wages fixed
by the competent authority.
(6)

Fixing hours for normal working day

In regard to any scheduled employment minimum rates of wages in respect of
which have been fixed under this Act, the appropriate Government may
(a)

fix the number of hours of work which shall constitute a normal working
day inclusive of one or more specified intervals.

(b)

provide for a day of rest in every period of seven days which shall be
allowed to all employees or to any specified class of employees and for the
payment of remuneration in respect of such days of rest.

(c)

provide for payment for work on a day of rest at a rate not less than the
overtime rate.

(7)

Overtime
If any employee whose minimum rate of wages is fixed under the Act works
on any day in excess of the number of hours constituting normal working day, the

employer is required to pay him at the overtime rate fixed under this Act or under any
law of the appropriate Government for the time being in force whichever is higher.
(8)

Wages for two or more classes of work

If an employee does two or more classes of work to each of which a different
rate of wages is applicable, the employer is required to pay to such employee in
respect of the time respectively occupied in each such class of work, wages at not less
than the minimum time rate in respect of each class.

(9)

Maintenance of registers and records

Every employer is required to maintain such registers and records giving
particulars of employees, the work performed by them, the wages paid to them, the
receipts given by them and any other required particulars.

(10) Inspections
The appropriate Government may, by notification in the official Gazette,
appoint inspectors for the purpose of this Act and define the local limits of their
functions.
(11) Claims
The appropriate Government may appoint Labour commissioner or any other
officer with experience as a judge of a civil court or as a stipendiary Magistrate to
hear and decide for any specified areas, all claims arising out of the payment of less
than the minimum rates of wages as well as payment for days of rest or for work
done.

(12)

Penalties for Offences

Any employer who contravenes any provision of this Act shall be punishable
with imprisonment for a term, which may extend to six months or with fine, which
may extend to five hundred rupees or with both.
III Statistics collected under the Minimum Wages Act, 1948
All establishments covered under the Act are required to furnish to the
concerned authority (Central or State) an annual return in prescribed form as per the rules
framed under the Minimum Wages Act, 1948. The Centre / State Governments in turn send a
consolidated return to the Labour Bureau which compiles an all India report based on the data
contained in these returns. Besides quarterly returns sent by these agencies to the Bureau are
also made use of in compiling data at all India level.
(i)

Addition of New Employments

The State Governments and the Union Territories review the Scheduled Employments

from time to time in their jurisdiction and add new employments in respect of which it is of
the opinion that minimum rates of wages should be fixed statutorily in addition to the existing
ones. During the year 2001, only two State Governments i.e. Tamil Nadu and Karnataka
have added employments to the Schedule appended to the Act. (Table 1)
(ii)

Fixation of Minimum Wages during 2001

During the year 2001 the minimum wages were fixed for the first time in respect of

only one State i.e. Tamil Nadu. (Table 2)

(iii)

Scheduled Employments and Prevailing Minimum Wage Rates

The Central Government and the different State Governments have been maintaining

a set of scheduled employments for fixing minimum rates of wages under their respective
jurisdiction. These scheduled employments undergo a change as and when there is an
addition of an employment in the schedules appended to the Minimum Wages Act, 1948.
The details of prevailing minimum wages relating to unskilled workers fixed / revised
in different scheduled employments in different States / Union Territories as on 31.12.2001
are presented in Table 3. The components of wage rates like Basic Wage and Dearness

Allowance have also been presented wherever available. In some of the scheduled
employments in some States / Union Territories consolidated wage rates have been fixed /
revised. In some of the scheduled employments, it was noticed that more than one rate of
minimum wage rates have been prescribed which indicates the minimum wages fixed /
revised for different Areas / Regions / Zones in the particular State / Union Territory. Some
of the States / Union Territories are yet to fix minimum rates of wages for some of the
scheduled employments (new or already existing) and the names of such employments are
also featuring in this Table.
(iv)

Scheduled Employments and Range of Minimum Wage Rates

The total number of employments for which the minimum wage rates have been fixed

/ revised and the range of minimum wage rates in different State Governments / Union
Territories as on 31.12.2001 have been given in Table 4.
It emerges from the table that the number of scheduled employments for which
minimum wages were fixed / revised was highest in the State of Orissa (82) followed by
Assam (75).
The dispersion of rates as measured by the range between the lowest minimum wage
rate and highest minimum wage rate is very wide say Rs. 8.46 as the lowest minimum wages
in the State of Maharashtra and highest minimum wage of Rs 147.96 in the State of Kerala.
(v)

Minimum Wage Rates in Scheduled Employments in Central Sphere / States /

Union Territories
Table 5 depicts the comparative minimum wage rate per day prevailing in scheduled

employments in Central Sphere / States / Union Territories. The main purpose of classifying
this information is to (a) study the inter-State variations in the minimum wage rates in a
particular scheduled employment in Central Sphere/ States/ Union Territories (b) know the
number and different types of scheduled employments prevalent in each State / Union
Territory for which minimum wage rates have been fixed.

It could be seen that as on 31.12.2001 there were in all 300 different types of
scheduled employments all over India for which minimum wage rates have been fixed by the
Central Government / States / Union Territories.
(vi)

Submission of Returns
The details regarding number of establishments covered under the Minimum Wages

Act, 1948 and those submitting returns as well as average daily employment State-wise have
been given in Table 6.
(vii)

Enforcement of the Act

In most of the States and Union Territories, there was no machinery appointed

exclusively for the enforcement of the Act but the inspection staff, appointed under other
labour Acts were entrusted with the enforcement of this Act also.
The State-wise details of Inspections made, irregularities detected, prosecutions
launched and claims preferred

CONCLUSION
The main objective of the Minimum Wages Act 1948, is fixing a minimum rate of wages in
number of industries where the labours are not organized and sweated labours are most
dominant. The appropriate government after an inquiry if find that there are more than 1,000
employees are working under any scheduled employment, it shall fix the minimum rate of
wages payable as soon as after such finding. The fixation and revision of wages falls under
the Sec 3, Sec 4 and sec 5.
The appropriate governments fix or revise minimum rate of wages which may consists of
i.
ii.
iii.

basic rate of wages and special allowance;

basic rate of wages with or with the cost of living allowance;
an all inclusive rate allowing for the basic rate, the cost of living allowance and

iv.

the
cash value of the concessions

Bibliography

1.) www.advocatekhoj.com
2.) labourbureau.nic.in
3.) minimumwagesact1948.blogspot.com
4.) www.ilo.org/
5.) en.wikipedia.org/wiki/Minimum_Wages_Act_1948
6.) www.kkhsou.in
7.) www.lawnotes.in
8.) labourbureau.nic.in
9.) indiankanoon.org
10.) Minisitry of Labour and Employment Labour Bureau. "The Working of
Minimum Wage Act, 1948 for the year 2008". Government of India: Misitry
of Labour and Employment Labour Bureau. Retrieved 7 November 2012.
11.) Biju Varkkey and Khushi Mehta. "Minimum Wages in India: Issues and
Concerns". Wage Indicator Foundation. Retrieved 7 November 2012.
12.) Paycheck India. "Minimum Wages in Andaman & Nicobar". Wage
Indicator Foundation. Retrieved 7 November 2012.
13.) Paycheck India. "Minimum Wages in Tripura". Wage Indicator
Foundation. Retrieved 7 November 201
14.) International Labour Office. Committee of Experts on the Application
of Conventions and Recommendations (1992). General Survey of the
Reports on the Minimum Wage-Fixing Machinery Convention (No.26) and
Recommendation (No.30), 1928 : the Minimum Wage-Fixing Machinery
(Agriculture) Convention (No.99) and Recommendation (no. 89) 1951: And
the Minimum Wage Fixing Convention (no.131) and Recommendation (no.
135), 1970 ; Report of the Committee of Experts on the Application of
Conventions and Recommendations (article 19, 22 and 35 of the
Constitution