The Minimum Wages Act, 1948 was an act of parliament concerning Indian labour law that sets the minimum wages that must be paid to skilled and unskilled workers. It has been repealed and replaced by The Code on Wages, 2019.
The Indian Constitution has defined a 'living wage' that is the level of income for a worker which will ensure a basic standard of living including good health, dignity, comfort, education and provide for any contingency. However, to keep in mind an industry's capacity to pay the Constitution has defined a 'fair wage'. Fair wage is that level of wage that not just maintains a level of employment, but seeks to increase it, keeping in perspective the industry's capacity to pay. Due to an unjust attention towards the decades-old law it is now exploited by major businesses to underpay their employees, In public opinion government must set a yearly wage change just like countries internationally do.
To achieve this in its first session during November 1948, the Central Advisory Council appointed a Tripartite Committee of Fair Wage. This committee came up with the concept of a minimum wage, which not only guarantees bare subsistence and preserves efficiency but also provides for education, medical requirements and some level of comfort.
India introduced the Minimum Wages Act in 1948, giving both the Central government and State government jurisdiction in fixing wages. The act is legally non-binding, but statutory. Payment of wages below the minimum wage rate amounts to forced labour. Wage boards are set up to review the industry's capacity to pay and fix minimum wages such that they at least cover a family of four's requirements of calories, shelter, clothing, education, medical assistance, and entertainment. Under the law, wage rates in scheduled employments differ across states, sectors, skills, regions and occupations owing to difference in costs of living, regional industries' capacity to pay, consumption patterns, etc. Hence, there is no single uniform minimum wage rate across the country and the structure has become overly complex. The highest minimum wage rate as updated in 2012 was Rs. 322/day in Andaman and Nicobar and the lowest was Rs. 38/day in Tripura. In Mumbai, as of 2017, the minimum wage was Rs. 348/day for a safai karmachari (sewage cleaner and sweeper), but this was rarely paid.
History 1920: 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 unorganised sector be enacted.
1947: Post-independence representatives of labour, employers, and government attended a government-organised 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.
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:
The cost of three consumption units- husband, wife and two children for one earner. Income from women and children should be ignored Satisfy the minimum food requirement of 2700 calories per person Clothing requirement of 72 yards for a family annually Rent of the minimum area as specified by Government's Industrial Housing Scheme 20% of minimum wage should be the cost of fuel and miscellaneous items of expenditure
1987: Parliamentary sub-committee on unorganised labour concluded that minimum wages fail to ensure a livelihood above the government defined poverty line for the unorganised 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.
1988: Labour Minister's Conference recommend the necessity of an allowance that safeguards wages against inflation, called Variable Dearness Allowance (VDA).
1991: Hon’ble Supreme court's judgment in the case of Reptakas & Co. specified that 25% of the minimum wages should also account for Children's education, required medical expenses, recreation in festivals/ceremonies and provision for old age and marriage. National Commission on Rural Labour (NCRL) recommended the government to introduce a national minimum wage floor level for uniformity.
VDA became effective. It is revised twice in a year, on 1 April and 1 October.
1992: Thirtieth session of ILC observed the ineffectiveness of states' implementation machinery and labour administration. It urged the civil society especially NGOs and workers' organisations to inspect and ensure payment of minimum wages. The thirtieth session also discussed that officials should be wary of fixing minimum wage rates to impracticable high levels.
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 neutralisation 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. Since 2009 it stands at INR 100/day.
2007: The Tamil Nadu state government announced that it has fixed minimum wages for 90% of all occupations.
The Indian National Trade Union Congress appeals for a "national decent minimum wage" for all industries that would be based on workers' needs.
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's 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 Rs. 100/- under the scheme.
On 12 August, the Andhra Pradesh wrote to the Ministry of Rural Development that workers under the MGNREGA scheme are being paid less than the Minimum wage rate and this could attract "contempt of court". There was no response to this.
On 10 July, the Labour Department responded to the notification of wage rate in MGNREGA scheme as against the minimum wage rate: "Minimum Wages Act, 1948 guarantees minimum wages to workers and there cannot be a wage rate less than the minimum wage rate in any circumstances."
2010: Andhra Pradesh's government says that any payment including that under the MGNREGA scheme, below minimum wage rate is unconstitutional.
2011: As per Karnataka High Court's interim order MGNREGA's wage rates are to be aligned with the Minimum Wage rates of the state.
National Human Right Commission convened a zonal workshop on fixation, revision and enforcement of minimum wage is Brick kiln industry.
2012: Mazdoor Kisan Shakti Sangathan urges the Supreme Court to withdraw the SLP to the PM to rediscuss Karnataka High Court and Andhra Pradesh high Court's judgments
Supreme Court asks the Central Government to consider respective states' minimum wages to bring parity between them.
The Labour Department decides to make revisions in minimum wage rates mandatory within three years.
2015: From 1 July 2015 the National Floor Level of Minimum Wage was raised to Rs 160 per day.
2015: On 1 September 2015 labours in unorganised sector extended their support to one-day nationwide general strike called by central trade unions (CTUs). Later than Shri Bandaru Dattatreya, the Minister of State(IC) for Labour 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.
2019: The Parliament of India passed the Code on Wages, 2019, which was notified on August 8, 2019. This new code is designed to amalgamate, simplify, and rationalize four central labour enactments: the Minimum Wages Act, 1948, the Payment of Wages Act, 1936, the Payment of Bonus Act, 1965, and the Equal Remuneration Act, 1976. A key feature of the new code is the introduction of a national floor wage to be set by the central government. State governments cannot fix minimum wages below this national benchmark, which aims to create more uniformity and reduce regional disparities in wages.
Contents The Act provides for fixing wage rate (time, piece, guaranteed time, overtime) for any industry .
1) While fixing hours for a normal working day as per the act should make sure of the following:
The number of hours that are to be fixed for a normal working day should have one or more intervals/breaks included. At least one day off from an entire week should be given to the employee for rest. Payment for the day decided to be given for rest should be paid at a rate not less than the overtime rate.
2) If an employee is involved in work that categorises his service in two or more scheduled employments, the employee's wage will include respective wage rate of all work for the number of hours dedicated at each task.
3) It is mandatory for the employer to maintain records of all employee's work, wages and receipts .
4) Appropriate governments will define and assign the task of inspection and appoint inspectors for the same.
Fixation and revision of minimum wages The Minimum Wages Act 1948 generally specifies minimum wage rates on a per day basis, and extends to the entire country and is revised within a period of not less than five years, however there is a provision to increase dearness allowance every two years. The norms in fixing and revision of minimum wages were first recommended by ILC, 1957.
Revision of minimum wage rates is based on a 'cost of living index' and wages can be fixed for an entire state, part of the state, class or classes and employments pertaining to these categories. The fixation of wages is based on the norms mentioned and a wage board (different for different industry).