Minimum Wages
What is the Act?
The Minimum Wages Act 1948 is an Act of Parliament concerning Indian labour law that sets the minimum wages that must be paid to skilled and unskilled labours.
The Indian Constitution has defined a ‘living wage’ that is the level of income for a worker which will ensure a basic standard of living including good health, dignity, comfort, education and provide for any contingency. However, to keep in mind an industry’s capacity to pay the constitution has defined a ‘fair wage’. Fair wage is that level of wage that not just maintains a level of employment, but seeks to increase it keeping in perspective the industry’s capacity to pay.
To achieve this in its first session during November 1948, the Central Advisory Council appointed a Tripartite Committee of Fair Wage. This committee came up with the concept of a minimum wage, which not only guarantees bare subsistence and preserves efficiency but also provides for education, medical requirements and some level of comfort.
India introduced the Minimum Wages Act in 1948, giving both the Central government and State government jurisdiction in fixing wages. The act is legally non-binding, but statutory. Payment of wages below the minimum wage rate amounts to forced labour. Wage boards are set up to review the industry’s capacity to pay and fix minimum wages such that they at least cover a family of four’s requirements of calories, shelter, clothing, education, medical assistance, and entertainment. Under the law, wage rates in scheduled employments differ across states, sectors, skills, regions and occupations owing to difference in costs of living, regional industries’ capacity to pay, consumption patterns, etc. Hence, there is no single uniform minimum wage rate across the country and the structure has become overly complex. The highest minimum wage rate as updated in 2012 was Rs. 322/day in Andaman and Nicobar and the lowest was Rs. 38/day in Tripura. In Mumbai, as of 2017, the minimum wage was Rs. 348/day for a safai karmachari (sewage cleaner and sweeper), but this was rarely paid.
Briefing about the Act
Minimum wages act is to fix minimum wages to the workers including skilled or unskilled workers in the industry. The Act came into force after World War II in 1948. India is one of the developing countries with a number of unemployed, therefore the employer exploit the manual labourers by fixing low wages which is insufficient to meet their daily needs and medical expenses. Hence, the legislature enacted a law to prohibit the payment of wages below the employee’s subsistence level.
Objective
To ensure that statutory fixation of minimum wages to prevent exploitation of labour. To ensure that the labourers have a minimum standard of life.
To bring social justice. To ensure that the workers can meet their daily needs, fisical necessity, proper health and comfort. To provide a perodic revision of minimum wages fixed.
To provide an appointment of Advisory Committee and Boards with the equal number of representative from employers and employees.
Importance
Minimum wages have been defined as “the minimum amount of remuneration that an employer is required to pay wage earners for the work performed during a given period, which cannot be reduced by collective agreement or an individual contract”.
The purpose of minimum wages is to protect workers against unduly low pay. They help ensure a just and equitable share of the fruits of progress to all, and a minimum living wage to all who are employed and in need of such protection.
Minimum wages can also be one element of a policy to overcome poverty and reduce inequality, including those between men and women, by promoting the right to equal remuneration for work of equal value.
Scope
- The wages that are paid to the workers should meet their physical needs and at the same time
- Keep them above starvation level
- It should ensure sustenance for their family; and
- Also enable them to subsist by preserving their efficiency as workmen in day-to-day life.