Minimum Wages Act India

A tripartite Committee Viz. , “The Committee on Fair Wage” was set up in 1948 to provide guidelines for wage structures in the country. The report of this Committee was a major landmark in the history of formulation of wage policy in India. Its recommendations set out the key concepts of the ‘living wage’, “minimum wages” and “fair wage” besides setting out guidelines for wage fixation. Article 39 states that the State shall, in particular, direct its policy towards securing (a) that the citizen, men and women equally shall have the right to an adequate livelihood and (b) that there is equal pay for equal work for both men and women.

Article 43 states that the State shall endeavour, by suitable legislation or economic organization or in any other way, to give all workers, agricultural, industrial or otherwise, work, a living wage, conditions of work ensuring a decent standard of life and full enjoyment of leisure, and social and cultural opportunities. Enactment of the Minimum Wages Act Historical Backdrop The initiative started with the resolution placed by one Shri. K. G. R. Choudhary in 1920 for setting up Boards for determination of minimum wages in each industry. The International Labour Conference adopted in 1928 Convention No.

26 and Recommendation No. 30 relating to wage fixing machinery in trades or parts of trades. On the recommendation of the Standing Labour Committee and Indian Labour Conference, a Labour Investigation Committee was appointed in 1943 to investigate into the question of wages and other matters like housing, social conditions and employment. A draft bill was considered by the Indian Labour Conference in 1945. The 8th meeting of the Standing Labour Committee recommended in 1946 to enact a separate legislation for the unorganized sector including working hours, minimum wages and paid holidays.

A Minimum Wages Bill was introduced in the Central Legislative Assembly on 11. 4. 46 to provide for fixation of minimum wages in certain employments. Under the Act, Central and State Governments are appropriate Governments to (a) notify scheduled employment (b) fix/revise minimum wages The Act contains list of all these employments for which minimum wages are to be fixed by the appropriate Governments. There are two parts of the Schedule. Part I has non-agricultural employments whereas Part-II relates to employment in agriculture.

Under the provisions of the Minimum Wages Act, 1948, both Central and State Governments are appropriate Governments to fix, review and revise the minimum wages of the workers employed in the scheduled employments under their respective jurisdictions. The appropriate Governments have also been empowered to notify any employment in the schedule where the number of employees is 1000 or more and fix the rates of minimum wages in respect of the employees employed therein. The Minimum Wages Act does not provide for any discrimination between male and female workers or different minimum wages for them.

All the provisions of the Act equally apply to both male and female workers. Characteristics of Minimum Wages Act * The objective of the Act is to ensure a minimum subsistence wage for workers. * The Minimum Wage Act, 1948 provides for fixation and enforcement of minimum wages in respect of schedule employments to prevent sweating or exploitation of labour through payment of low wages. * Minimum wage legislation is the main labour legislation for the workers in unorganized sector where labour is vulnerable to exploitation due to illiteracy and does not have effective bargaining power, the intervention of the government becomes necessary.

* The review and revision of the minimum rates of wages at intervals not exceeding five years. * The minimum wage rate may be fixed at a) time rate, b) piece rate, c) guaranteed time rate and d) overtime rate. * The Act provides that different minimum wage rate may be fixed for a) different scheduled employments, b) different works in the same employment, c) adult, adolescent and children, d) different locations or e) male and female. * Also, such minimum wage may be fixed by a) an hour, b) day, c) month, or d) any other period as may be prescribed by the notified authority.

* In order to protect the minimum wages against inflation, the concept of linking it to the rise in the consumer price index was recommended in 1988. Since then, the concept of Variable Dearness Allowance (VDA) linked to consumer price index has been introduced which is revised twice a year in April and October. Norms for fixation/revision of minimum wages The norms include those which were recommended by the Indian Labour Conference in its session held in 1957. (a) 3 consumption units for one earner. (b) Minimum food requirements of 2700 calories per averageIndian adult. (c) Clothing requirements of 72 yards per annum per family.

(d) Rent corresponding to the minimum area provided for under Government’s Industrial Housing Scheme. (e) Fuel, lighting and other miscellaneous items of expenditure to constitute 20% of the total Minimum Wages. e) Children education, medical requirement, minimum recreation including festivals/ceremonies and provision for old age, marriage etc. should further constitute 25% of total minimum wage. Issues with the Wage Policy * The Act does not set out a minimum wage in rupee terms, but just stipulates that the wage be a living wage8 which is to be decided by labour department in each state.

* In many states while fixing the minimum wages, they are not linked to the payment of dearness allowance. As a result, real wages of workers keep eroding due to inflation, pushing them below the poverty line. * The MWA requires wages to be revised every five years, this rarely happens. * The MWA also has a clause which states that if wages are not revised, the existing wages should continue. Such an arrangement has only led to greater laziness and unaccountability on the part of state labour departments, leaving some workers to live below poverty line.

* Different wages are fixed for the same work in different sectors. * The criterion for inclusion in the list of scheduled employment is that there should be at least 1000 workers engaged in that activity in the state. Thus, many activities are excluded from the list. This criterion for inclusion has left a very large number of workers in the unorganised sector outside the purview of the Minimum Wage Act. * The Act empowers the appropriate government (Central, Sate or Local) to fix a minimum wage for workers in unorganised sectors.

However, often exemptions from the payment of minimum wages have been granted to industries. * A failure in implementation of MWA is not only due to loopholes in policy design but is also an outcome of lapses in the administration. * Many workers for the fear of losing their jobs do not report about payments lower than the minimum wage rate. At times, these workers are even forced by their employers to certify payments below minimum wages. * The issue arises mainly due to lack of awareness amongst the workers about minimum wage provisions and their entitlement under the labour laws.