Minimum Wages Act, 1948, an act to prevent labour exploitation

Minimum wages act, 1948

The Minimum Wages act was passed and came into force in the year 1948 which was a landmark in the history of labour legislation of India. This Act is applicable to the whole of our country.

According to the Supreme Court, the aim of this act is to prevent labour exploitation and empowers the government to take appropriate steps to prescribe a minimum wage in certain scheduled employments. Theses employments originally include employments in aluminium and tin manufacturing industries, construction and maintenance of dams, fish peeling, canning, freezing and sea food export, match industries, hill produce, rubber products, manufacturing of medicines which includes ayurvedic and allopathic medicine, hosiery industry, power loom excluding employment in cotton textile mills, employment in any woolen and carpet making industry, shawl weaving industry, employment in plantations including cinchona, rubber, tea, coffee and cardamom, employment in rice mill, flour mill or dhal mill, tobacco manufacturing, construction and maintenance of roads and buildings, employment in stone crushers, mica works, public motor transport, salt pan, printing presses, tiles industries, toddy tapping industries, tanneries and leather industries, employment in banks(not fixed), shops, hotels and restaurants, employment in handloom, plywood and minor ports, water boat transport, forest and minor engineering, ice manufacturing, employment in hostels,, handling and caring of elephants, oil palm plantations and any employment in cinema and theatres.

Currently there are 45 numbers of scheduled employments in the Central sphere and 1650 scheduled employments in the State sphere.

In the year 2007, the national Floor Level of minimum wage was Rs 80per day and it increased to Rs 100 per day in 2009. It has been increased to Rs 115 per day in 2011.

Minimum rates of wages fixed by the government

According to Section 3(1)(a) of the Minimum Wages Act, minimum rates of wages which is payable to the employees should be fixed by the appropriate government. The employments are classified into two parts viz part I and Part ii and the government can fix the minimum rates of wages in these two parts by giving proper notification. The minimum rates of wages are not fixed for the employments specified in Part I for the whole state. On the other hand, it is fixed for the employments specified in part I for the whole state though it may not be uniform. Government can fix different wage rate for different zones. In case where there are less than 1000 employees in the entire state in some specified employments the government may not fix any rate of wages. When the number of employees increased to 1000 or more the appropriate government fix a minimum wage rate.

Here appropriate government means the Central government in respect of any schedule employment carried on by the Central government or a railway administration, or employment in relation to a mine, oilfield or corporation established by the central government and State Government in respect of any other schedule employment.

Revision and manner of fixation of minimum wage rate by the Government

The minimum wage rate is revised at intervals which the government thinks fit. But this interval does not exceed 5 years. It can be revised earlier than five years.

Minimum rate of wages may be different for different employments such as different schedule employments, different types of work in the same employments, employments in different places and works by adults, apprentices and adolescents.

According to Section 3(2) of the Minimum wages Act, there are different work rate for fixing the minimum wage rate by the government which are as follows
(a) "Minimum time rate based" on time work
(b) "Minimum piece rate" based on piece work
(c) "Guaranteed time rate" based on employers who are engaged in piece work for securing a minimum wage rate on a time work basis and
(d) "Over time rate" which may be a time rate or piece rate in substitution of minimum rate in respect of overtime work of the employee.
(e) The minimum rates of wages can be fixed for different wage periods such as (i) by the hour (ii) by the day (iii) by the month and (iv) by such other wage periods larger than these.

Minimum rates of wages

As prescribed in Section 4 of the Act, the minimum wage rate consists of the following
(i) A basic wage rate and cost of living allowance. This cost of living allowance is directed by the appropriate government to accord as soon as practicable with the variation in the cost of living index number applicable to such worker.
(ii) The cash value of the concession in respect of essential commodities supply at a concessional rate with the basic wage rate.
(iii) The cost of living allowance, the cash value of the concessions and an all inclusive rate allowing for the basic rate if any.

The competent authority computes the cost of living allowance and the cash value of the concessions as directed by the appropriate authority on proper intervals.

Methods for fixing and revising minimum wages

There are two methods given in Section 5 of the Minimum Wages Act for fixing the minimum wage rate. The two methods are described below.

(i)Committee Method – This is the first method given in Section 5(1)(a) of the Act. According to this method many advisory committees and sub-committees are appointed by the appropriate government for fixing minimum wage rate. After considering their advice, the government fixes or revises the minimum wage rate by giving notification in the official gazette. A date is specified in the gazette from which the wage rate shall come into force, but if no date is mentioned, it comes into force on the expiry of three months from the date of the issue of the notification.

The advisory committee consists of employers and employee of the schedule employment nominated by the appropriate government who shall be independent person and equal in number and not exceeding 1/3rd of its total number of members. From these independent persons, one is selected as chairman of the committee by the government.

(ii)Notification method—this second method is prescribed in Section 5(1)(b) of this Act. In this method the appropriate government publishes its proposals in the official gazette by giving proper notification so that the persons likely to be affected can get the information about this. The government specifies a date on which the proposals will be taken into consideration which shall not be less than 2 months from the date of such notification. when representations are received by the government it consults with the advisory committee to fix a minimum wage rate and give notifications about this new or revised wage rate in the official gazette. As in the first method, the new or revised wage rate come into force from the date as given in the notification but if no date is given it will come into force on expiry of three months from the issuing date.

Minimum wage rate—paid both in cash or kind

According to Section 11 of the Minimum Wages Act, though minimum wages are paid in cash but if there are customs to pay wages in kind, the appropriate government after considering and being satisfied may approve for payment in kind. In this case, supply of essential commodities at concessional rates is authorized by the appropriate government.

Employer's obligation to pay minimum wage

According to section 12 of the Minimum wages act, employers should pay every employee the minimum wages as fixed by the appropriate government. Payment made less than this minimum wage rate is an offence.

Offences and penalties in the Minimum Wages Act

According to Section 22 of the Minimum Wages Act, any employer who paid his employees less than the minimum wages fixed by the appropriate government is punishable with imprisonment and fine. The term of imprisonment may extend to six months or with fine. The fine may be extended to 500 rupees. The employers are also punishable with both imprisonment and fine.

Fixing hours for a normal working day to pay minimum wages to employees
According to Section 13 of the Minimum Wages Act, the government may fix the number of work in a normal working day. One or more specified intervals are included here. The government may also provide a day of rest in a week. The employees are paid at a rate for the rest day also as provided by the government which shall not be less than the overtime rate. These provisions include the following classes of schedule employees:
(i) Employees engaged in emergency which could not be prevented or those employees who are engaged in urgent work.
(ii) There are some complementary or preparatory works which should be carried on outside the limits fixed by the employer. The employees working in such types of works are included in this provision.
(iii) There are some works which have to be completed for some technical reasons before the duty is over. The employees engaged in such work are also included in this provision.
(iv) Sometime there are such work which could not be done except at times dependent on the irregular action of the natural forces. The employees engaged in these type of works are included in this provision.
(v) It also included those employees whose employment is necessarily intermittent. Their working hours include period of inaction ie the employee is not called upon to present physically though he is on duty.

Payment of Overtime to the employees

According to Section 14 of the Minimum Wages Act, an employee engaged in any schedule employment who does overtime ie works in excess of his normal working hour should pay for every hour or part of an hour worked in excess under the Minimum Wages Act or any other law made by the appropriate government whichever is higher. But only those employees who get minimum rate of wages can claim this. Those employees who get a better wage cannot claim this payment.
What is the wage of a worker when he works less than the normal working hour?
According to Section 15 of the Minimum Wages Act, if a worker works less than the normal working hour, he will be paid fully as the normal working hour. But if he is absent in his work unwillingly and such other cases and circumstances as prescribed in the Minimum wages Act, he will not be paid fully as the normal working day.

In case where a worker does piece work, he will be paid according to Section 17 of the Act only when he is given a minimum time rate.

Authority and claims under Minimum Wages Act

When there exists a dispute between the employer and employee arising out of payment less than the minimum wage rate, the appropriate government appoints an authority to hear and decide claim. The authority may be a Commissioner for workmen's compensation, any officer of the Central government who works as Labour Commissioner for any region, an officer equal to the rank of a Labour Commissioner from the State government and a Judge of a Civil Court.

Maintenance and register of records of employees under Minimum Wages Act

According t Section 18 of this Act, every employee is required to maintain registers and records about the particulars of the employees under their employment. It should include the work performance of the employees, the receipts given by the employees etc. and the employee is also required to maintain wage books or salary slips and he is also required to exhibit notices of particulars of his work place in the prescribed form given by the appropriate government. The entries made by the employees are authenticated by the employer or his agent.

As the State government has the power to fix the minimum wage, there are disparities among the states. So the Central Government has set up 5 regional committees to reduce this problem. Here are given the committees.

(i) Eastern Region— It includes 6 states viz west Bengal, Orissa, Bihar, Jharkhand, Chattisgarh, Andaman and Nicobar island.

(ii) North eastern region—it has includes Arunachal Pradesh, Assam, Meghalaya, Nagaland, Manipur, Mizoram, Tripura and Sikkim.

(iii) Southern Region—it includes Andhra Pradesh, Karnataka, Kerala, Tamil Nadu, Puducharry and Lakshadweep.

(iv) Northern Region—it includes Punjab, Rajasthan, Himachal Pradesh, Jammu and Kashmir, Haryana, Uttar Pradesh, Uttarakhand, Delhi ad Chandigarh.

(v) Western Region—It has the states viz Maharashtra, Gujarat, Goa, Madhya Pradesh, Dadra and Nagar Haveli and Daman and Diu.

Minimum Wages Act, 1948, an act to prevent labour exploitation