Minimum Wages Acts 1948

Objectives of the Act

• To provide minimum wages to the workers working in organized sector 
• To stop exploitation of the workers
• To empower the government to take steps for fixing minimum wages and to revising it in a timely manner 
• To apply this law on most of the sections in organized sector (scheduled employment)

Historical Backdrop

The initiative by Shri K.G.R.Choudhary in 1920: set up boards for determination of wages

The International Labour Conference adopted convention 26 and 30 in 1928 relating to wage fixing machinery in trades or parts of trades

 A Minimum Wages Bill was introduced in the Central. Legislative Assembly on 11.4.46 and came into force with effect from 15.3.48

The Committee on Fair Wage was set up in 1948 to provide guidelines for wage structure

Broad Features of the Act

[Sec 3]: The Act lays down the principles  for fixation of

• A minimum time rate of wages

• A minimum piece rate

• A guaranteed time rate

• An overtime rate for different occupations, localities or classes of work and for adults, adolescents, children and apprentices

[Sec 4]: The minimum wages may consist of

• A basic rate of wages and a cost of living of allowances

• A basic rate of wages with or without the cost of living allowance and the cash value of the concessions in respect of essential commodities supplied at concessional rates

Short Title and Extent [Sec. 1]

• This Act, the Minimum Wages Act, 1948 extends to the whole of India
• This Act may be called the Minimum Wages Act, 1948

Who all are eligible?

• Permanent employees
• Contract employees
• Casual workers
• People on probation get fixed pay instead of minimum wages.
• Trainees get stipend and not minimum wages

What  is appropriate  government? [Sec 2(b)] 

• In relation to scheduled employment carried on Central Government or railways or est. under Central Act, the Central Government
• In all other cases - the State Government

Wages [Sec. 2(h)]

• Minimum wages: all remuneration capable of being paid in money terms for work done if terms of contract were fulfilled
• consist of Basic + Dearness Allowance + House Rent Allowance
• Every 5 years, basic rates of every industry are decided by Minimum Wages Committee
• Dearness Allowance changes every six months and is decided by Government
• Other Definitions

Section No.
2 (bb)	Child
2 (a)	Adolescent
2 (aa)	Adult
2 (c)	Competent authority
2 (d)	Cost of Living Index Number
2 (e)	Employer
2 (g)	Scheduled Employment
2 (i)	Employee

 Fixing minimum rate of wages [Sec. 3]

The Appropriate Government:

·         Shall fix minimum rates of wages for an employment specified in Part I or Part II of Schedule 86 added by notification in official gazette

·         May fix rates for a part of the state or for any specific class or classes instead of fixing minimum rate of wages for whole state

·         Shall review and revise at intervals not exceeding 5 years the minimum rates of wages

Different Minimum Wages May Be Fixed By The Government For:

·         Different employments (specified in the schedule)

·         Different classes (e.g. skilled, unskilled, semis skilled, etc.) of work in the same employments

·         Adults, adolescents, children and apprentices

·         Different localities

Segregation

Minimum rates of wages may be fixed by any one or more of the following wage periods, namely: 

• By the hour 
• By the day 
• By the month 
• By such other larger wage period as may be prescribed; and where such rates are fixed by the day or by the month, the manner of calculating wages for a month or for a day, as the case may be, may be indicated

 Different Minimum Wages May Be Fixed By The Government May consist of [Sec. 4]

1.       Basic + Special Allowance (Which varies with the cost of living index)

2.       Basic + Cash value of concessional supply of materials like food, clothes, etc

3.        An all inclusive rate which includes Basic + Cost of living Allowance + Cash value of 1 concessional supply of materials

Fixing Minimum Rates of Wages [Sec. 5]

• Publish its proposals in the official gazette asking comments from the affected parties
• Constitute committees/sub committees for the purpose. 
• The committees/ sub-committees and advisory boards constituted by the Government consist of equal number of members of : 

• Employers
• Employees, and
• Independent persons

Advisory Board [Sec.7]

• Appointed by appropriate government

• To co-ordinate the work of committees and sub committees appointed under Section 5

Central Advisory Board [Sec. 8]

To advise the Central and State Governments in fixation and revision of minimum rates of wages To co-ordinate the work of the Advisory Boards

Composition of Committees, etc. [Sec. 9]

Each of the committee, sub-committee and the Advisory Board shall consist of:

a. persons to be nominated by the appropriate Government

b. representing the employers and employees in the scheduled employments who shall be equal in number and

c. independent persons not exceeding one-third of its total number of members: one of such independent persons shall be appointed the Chairman by the appropriate Government.

 Correction of errors [Sec. 10]

• By appropriate Government at any time
• By notification in the Official Gazette
• Correct clerical or arithmetical mistakes or errors arising from and accidental slip or omission.
• Every such notification shall be placed before the Advisory Board for information.

 Wages in Kind [Sec. 11]

• Minimum wages shall be paid in cash. 
• The appropriate govt. may authorize, where there has been a custom of payment in this manner, payment of minimum wages either wholly or partly in kind 
• The appropriate govt. may authorize supply of essential commodities at concessional rates

 Minimum paymrent  rate of wages [Sec. 12]

• The Minimum Wages has to be paid without any deductions other than Statutory Deductions.

• Payment of wages less than minimum wages on the ground of less performance or output is illegal

Normal working works [Sec. 13]

For an Adult Worker working in Factories:

·         Number of Working Hours should not exceed 48 Hours in a week with a weekly Holiday

·         The Daily Hours should not exceed more than 9 Hours with 1 Hour Rest Interval

·         Provision of Compensatory Holiday/ Overtime Wages if working on holiday

 Overtime wages [Sec. 14]

·         If the person has worked for more than 48 hours in a week then, the excess hours worked will be treated as Overtime

·         Overtime wage rate will be twice of the normal wage rate

Wages for a person who has worked less than normal working hours [Sec. 15]

·         Employer could not provide the activities of the job then, the employee is entitled to receive full salary

·         Employee has not worked due to his unwillingness then, the employee is not entitled to receive full salary

Records to be maintained [sec. 18]

The Registers should contain the following particulars-

(i)                  particulars of employed persons

(ii)                 the work performed by them

(iii)               the wages paid to them

(iv)              the receipts given by them

Claims [Sec. 20]

·         A Labour Commissioner or any other appointed authority is authorized to hear claims regarding non-payment of minimum wages

·         Any aggrieved person may apply to the authority for settling his claims within 6 months

Penalties [Sec. 22]
Offence	Punishment
Payment of less than Minimum Wages to employee	Imprisonment which may extend up to 6 Months or Fine which may extend up to Rs 500/- or Both Contracting out [Sec. 25]

Any contract or agreement, whether made before or after the commencement of this Act, whereby an employee either relinquishes or reduces his right to a minimum rate of wages or any privilege or concession accruing to him under this Act shall be null and void so far as it purports to reduce the minimum rate of wages fixed under this Act.

Power of State Government to add schedule [Sec. 27]

• The State Government has to notify in the Official Gazette not less than three months of its intention to do so
• Power of Central Government to give directions [Sec. 28]
• The Central Government may give directions to a State Government as to the carrying into execution of this Act in the State.

Power of the central Government to make rules [Sec. 29]

• Procedure to be followed in conduct business
•  Method of voting
•  Manner of filling of casual vacancies in membership
• Quorum necessary for the transaction of business of the Central Advisory Board.

List of some important forms

Form No.	Rule	Description
III	21 (4a)	Annual Return
V	26 (5)	Muster Roll
X	26 (1)	Register of Wages
XI	26 (2)	Wage slip