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What is minimum wage?
According to the International Labour Organisation (ILO), “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.”
In simpler words, the Minimum wage is the lowest amount of money an employer can legally pay their employees for a given period of work. In India, the minimum rate of wages is determined by the Minimum Wages Act of 1948. Section 3 of this act allows the central and state governments to determine the minimum wage, showing the different conditions across the economy. The minimum wage aims to ensure that workers receive a baseline level of income to cover basic living expenses.
Factors Considered in Determining Minimum Wage
1. Cost of Living
The cost of living is a crucial factor in determining the minimum wage. It includes the prices of essential commodities, housing, fuel, and other necessary items.
2. Productivity
The productivity of workers is also taken into account. This ensures that the minimum wage is not too low and does not stop the growth of industries.
3. Local Conditions
The local conditions, such as the cost of living and the economic conditions of the region, are considered while fixing minimum wages. This helps in ensuring that the minimum wage is appropriate for the local economy.
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4. Employment Categories
Minimum wages are fixed for different employment categories, including skilled and unskilled labourers. This ensures that all workers receive a fair and equitable wage.
5. Number of Employees
If there are less than 1,000 employees in a particular industry or sector, the Central or State Government may not fix minimum wages for that industry. This is mentioned under Section 3 (1A) of the Minimum Wages Act of 1948.
Methods of Fixing Minimum Wage
1. Committee Method
This method involves setting up committees and sub-committees to hold enquiries and make recommendations for fixing and revising minimum wages.
2. Notification Method
The appropriate government publishes proposals in the official gazette, specifying a date at least two months away for the consideration of these proposals. Before publishing these notifications, the government consults various committees and sub-committees.
Procedure for Fixing Minimum Wage
1. Section 3 of the Minimum Wages Act
This section gives the power to the relevant government to fix the minimum rates of wages. The rates can be fixed by the hour, day, month, or any other larger wage period.
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2. Section 5 of the Minimum Wages Act
This section outlines the procedure for fixing and revising minimum wages. It states the establishment of advisory boards and the publication of notifications.
Enforcement and Compliance
1. Penalties
Employers who do not maintain registers or records as required under the law are liable for fines. Workers who receive wages less than the government-declared minimum wages can file complaints with the labour inspectorate.
2. Judicial Precedents
The Indian Supreme Court has provided precedents in cases such as PUDR v. Union of India and Sanjit Roy v. State of Rajasthan, stating that any wage below the prescribed rate goes against Article 23 of the Indian Constitution, which prohibits forced labour.
Minimum wages in different states
You can check the minimum wage of the states here:
- Andhra Pradesh Minimum wages
- Assam Minimum wages
- Bihar Minimum wages
- Chandigarh Minimum wages
- Delhi Minimum wages
- Goa Minimum wages
- Gujarat Minimum wages
- Haryana Minimum wages
- Himachal Pradesh Minimum wages
- Jharkhand Minimum wages
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- Karnataka Minimum wages
- Kerela Minimum wages
- Madhya Pradesh Minimum wages
- Maharashtra Minimum wages
- Manipur Minimum wages
- Meghalaya Minimum wages
- Mizoram Minimum wages
- Odisha Minimum wages
- Punjab Minimum wages
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- Rajasthan Minimum wages
- Sikkim Minimum wages
- Tamil Nadu Minimum wages
- Telangana Minimum wages
- Uttar Pradesh Minimum wages
- Uttarakhand Minimum wages
- West Bengal Minimum wages
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FAQs
1. How Often is the Minimum Wage Revised?
Minimum wages are typically revised every five years. However, adjustments can be made more frequently based on inflation, economic conditions, and other relevant factors.
2. What are the Penalties for going against the Minimum Wage Laws?
Employers who fail to pay the minimum wage can face penalties, including** fines and imprisonment**. Workers also have the right to file complaints with labour authorities if they are not paid according to the minimum wage laws.
3. Are There Different Minimum Wages for Different Sectors?
Yes, minimum wages can vary significantly between different sectors and states. For example, the minimum wage for agricultural workers may differ from that of industrial workers.
4. How Can Workers Know the Applicable Minimum Wage for Their Job?
Workers can find out the applicable minimum wage for their job by contacting the state labour department, checking official government websites, or consulting with trade unions.
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5. Does the Minimum Wage Apply to All Workers?
The minimum wage law applies to all workers in scheduled employment, which is listed by the Central and State governments. This includes permanent as well as temporary workers.
6. Can Employers Pay More Than the Minimum Wage?
Yes, employers can pay more than the minimum wage. The law sets the minimum standard, but employers are free to offer higher wages based on their policies and financial capacity.
REFERENCES
Written by Anushka Patel
Anushka Patel is a second-year law student at Chanakya National Law University. She is a dedicated student who is passionate about raising public awareness on legal matters
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Further Reading
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