Minimum Wage in India

Minimum Wage in India: Concept and Law

This article on ‘Minimum Wage in India: Concept and Law‘ was written by Shraddha Pandey, an intern at Legal Upanishad.

Introduction

This article talks about the concept of minimum wage in India with laws and its objective. Wage is generally a monetary amount given to a person in return for his hard work, and it is one of the most traditional methods that has been followed from old times. Wages were traditionally paid in kind, with grains and food being the most common. The number of wages soon became a source of contention between employers and wage-earners.

The specification of adequate wages that should be significantly paid to dead workmen by the employer was a multidimensional phenomenon, depending upon circumstantial factors such as the location of the manufacturing unit, manufactured product prices, living standards, daily requirements of dead wage-earner, and policies given by the government in society.

Meaning of wages

Wage is money given by the workmen to the workers in return for labor done. It can be decided as a specific pay for every completed work (the work wage or according to piece rate), a timely or daily rate, or an easily definable amount of work done. Section 2(h) of the Minimum wages Act, 1948 discusses wages in India.

Types of wages

A treble group called ‘Committee on Fair Wages’ was formed in 1948. The group’s survey served as a model for wage policy formulation in India. The group gave standard rules for wage rates within the state, and further, it gave mainly three types of wages known as:

  1. Minimum wage: It is the wage that helps workers to provide for bare minimum substance and basic privileges like having a decent standard of living, like providing education, health facility, and an appropriate level of comfort.
  2. Fair Wage: A fair wage is a remuneration given to workers those higher than the nominal wage. The wage helps to maintain an eligibility criterion for employment in the industry while also considering the ability of the production unit to pay appropriate payments to the workers.
  3. Living Wage: A living wage ensures to meet the employer’s basic needs for employees and allows bachelors or families to have the privilege of having a home, food, and other basic necessities. It also includes health, sanity, education, dignity, comfort, and planning for the unexpected.

Minimum wage in India

It was introduced in India in 1948 to provide laborers with a basic social and economic lifestyle.

The minimum wage goal is to avoid and secure laborer’s from unfairly less income. It helps them to get a fair wage for their efforts and maintain a basic standard of living. It also serves as a tool for eradicating insufficiency of goods and eliminating gender distinction. This system was designed and developed to help and strengthen other communal and employment policies, such as pattern bargaining, which is used as a reference to make employment terms and working conditions.

Minimum Wage in India
Minimum Wage in India

Legal framework

The Indian Legislature passed the Minimum Wages Act in 1948 to address issues concerning the provision of a minimum wage to workers for them to meet the necessary needs and live a satisfactory standard of living.

 The Act also makes sure to secure enough living wage for all laborers, as well as that laborer also saves enough to support their loved ones. This Act empowers federal as well as state governments to set nominal wages. The Minimum Wages Act of 1948 in addition included a specification for minimum wage redrafting to account for changes in the prices of basic commodities.

The Minimum Wages Act, of 1948 governs and regulates the payment of minimum wages in India. Since then, India has had very ruthless labor costs in the world, with the country-level minimum wage hovering about Rs 180, or Rs 4656 per month. The national-level wage, on the other hand, will vary depending on other material factors based on location.

 In India, a complicated procedure of determining a nominal wage is practised, which decides the nominal pay for nearly 1900 various kinds of jobs for comparatively less skilled or untrained laborers and in charge of 350 groups of work, each having its nominal pay.

The Act aims to improve employee rights protection by initializing a group of people known as advisory boards to settle any disagreement between workers and workmen related to the amount of the nominal pay to employees. The Act also designates an officer with judicial experience to listen to and understand cases involving employment issues related to the monetary amount of less nominal pay.

 The Act also includes steps for penalizing the workmen that fail to pay the nominal pay within the given time and violates any rules and regulations specified in the Act.

Application of law in India

Section 1 of the Minimum Wage Act of 1948 states that the Act applies to the entire country of India. It is applicable to every job that gives employment to 1000 people of the given state in question. It is not applicable to the employees in any industry or manufacturing unit that falls under the Central Government or federal railways, by the permission of the Central Government.

Essentials provisions under the Act

Some of the important specifications are as follows

  1. Minimum rates of wages
  2. Appointment of Advisory Board
  3. Fixing of working ours in normal day
  4. Record of official list and file
  5. Appointment of Inspector

Penalties of offences

According to section 22 of the Minimum Wage Act of 1948 an employer who fails to provide minimum rates of wages to the employees or contravenes any rule or order made under Section 13 of the Act shall be punished with imprisonment for a term which may extend to six months or fine not less than five hundred rupees or both.

Conclusion

Thus, there was a need to provide guidelines related to the minimum wage to help the laborers to have a social and economic lifestyle. To help them provide with basic lifestyle and medical help. The introduction of The Minimum Wages Act, of 1948 led to the safeguarding of the rights and interests of the workers. This Act also led to rules against employers who failed to pay minimum wage. It also helped in fixing working hours on a normal day. This Act also grants some authority to judges and inspectors and officers who look after the safety of the employees.

References

  1. Bare Act Minimum Wages Act, 1948 ( https://clc.gov.in/clc/sites/default/files/MinimumWagesact.pdf )
  2. Minimum Wage ( https://www.simpliance.in/minimum-wages )
  3. Anita, Different concepts of Wages ( https://www.legalserviceindia.com/legal/article-1127-different-concepts-of-wages.html )
  4. Abanti Bose & Rachit Garg (May 19, 2022) Minimum Wages Act, 1948 ( https://blog.ipleaders.in/minimum-wages-act-1948-2/ )

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