Minimum Wages are the least amount of remuneration that an employer is legally required to pay a worker for the work performed during a given period. This concept is critical in safeguarding workers—particularly those in unorganized and low-income sectors—from exploitation. In India, minimum wage laws aim to ensure that all workers can afford a basic standard of living, including nutrition, shelter, healthcare, and education.
The Minimum Wages Act, 1948, is the primary legislation governing this area. It mandates that both the Central and State Governments fix minimum rates of wages for scheduled employments. These rates can vary depending on the skill of the worker (unskilled, semi-skilled, skilled), location, and nature of the work. Revisions typically consider factors like inflation, cost of living index, and prevailing wage levels.
Legal Framework and Provisions
Under the Minimum Wages Act, 1948, key provisions include:
- Section 3 empowers the appropriate government to fix and review minimum wages at intervals not exceeding five years.
- Section 4 lays out the procedures for calculating minimum wages, considering basic rates, cost of living allowances, and the cash value of concessions.
- Section 12 mandates that no employer shall pay less than the minimum wages notified by the government.
- Failure to comply with the Act can lead to penal consequences under Section 22, which includes imprisonment up to 6 months or fine up to ₹500 or both.
Moreover, with the Code on Wages, 2019, which aims to consolidate four major labour laws (including the Minimum Wages Act), a uniform minimum wage floor has been proposed, making compliance simpler and more transparent across industries and states.
Mnemonic to Remember the Key Points of Minimum Wages Act
“WAGES”
- W – Welfare of workers ensured
- A – Appropriate authority fixes the wages
- G – Government notified scheduled employment
- E – Equal pay for equal work ensured
- S – Standard of living safeguarded
