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What are my rights as an employee in India?

What is the definition of minimum wage?

According to the International Labour Organization, 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.”

Which law governs minimum wages in India?

The Code on Wages, 2019 was passed by the Rajya Sabha on August 2, 2019 and signed into law by President Ram Nath Kovind on August 8, 2019. The code aims to provide a more comprehensive framework for regulating wages and bonuses in India, and to protect workers while promoting economic growth. The code combines and updates rules from four old laws: the Payment of Wages Act (1936), the Minimum Wages Act (1948), the Payment of Bonus Act (1965), and the Equal Remuneration Act (1976).

How is the minimum wage determined in India?

India offers some of the most competitive labor costs in Asia, with a national minimum daily wage of about INR 178 (around US $2.13), which equates to roughly INR 5340 (about US $63.97) per month. This amount represents the baseline wage and may vary based on factors such as location and specific conditions.

India's minimum wage and salary structure depends on various factors like the state, local development level, industry, job type, and skill level.

India uses a detailed system to set minimum wages, defining almost 2,000 types of unskilled jobs and over 400 job categories. Each job type has a specific minimum daily wage. Workers are categorized as unskilled, semi-skilled, skilled, or highly skilled.The monthly minimum wage also includes a variable dearness allowance (VDA) to adjust for inflation based on changes in the Consumer Price Index (CPI) and, if applicable, a house rent allowance (HRA).

Minimum wage rates are affected by the worker’s skill level and job nature. Therefore, minimum wage rates in different states and union territories can change regularly, especially for the VDA and other allowances.

How is the minimum wage set?

The code on wages, 2019 allows both the Central and State governments in India to establish, review, and update minimum wages for workers in designated industries. The Act categorizes minimum wages based on employment types, such as time work, piece work, and overtime.

In setting these wages, the government considers several factors, including the cost of living, skill level, current wage rates, recommendations from the Indian Labour Conference, and the needs of workers and their families.

The government also considers the gross wage, which may include:

Basic pay
Performance-related payments
Allowances for shift work and irregular hours
Fixed payments for turnover
Payments from third parties related to work

How do minimum wage rates vary by region and sector?

The Central Government sets a national minimum wage that applies to all sectors and industries, but state governments can set their own minimum wages that are higher than the national minimum. For example, in 2012, the highest minimum wage rate was Rs. 322/day in Andaman and Nicobar and the lowest was Rs. 38/day in Tripura. Wage boards are set up to review and fix minimum wages at specified intervals

How often are minimum wages revised?

Minimum wages are scheduled to be revised every five years. Presently, state governments have the authority to adjust these wages, provided they do so within this five-year timeframe. This flexibility allows states to periodically update wage levels without exceeding the five-year limit.

What are the standard working hours as per Indian labor laws?

As of 2020, India's Occupational Safety, Health, and Working Conditions (OSH) Code limits the standard working hours for employees to 8–9 hours per day and 48 hours per week. This includes a lunch break, and employees are entitled to a 30–60 minute break every 4–5 hours. Any work beyond these limits is considered overtime. The total number of hours worked, including overtime, should not exceed 10.5 hours in a day and 60 hours in a week.

Illustrative image showing employees working

What constitutes overtime and how is it compensated?

The code sets overtime wages at two times the normal wages.

Under Sections 51 and 59 of the Factories Act of 1948, employees are not permitted to work more than 48 hours per week or exceed 9 hours per day.

What are the special provisions for women, minors, or specific industries?

Various laws and regulations in India provide comprehensive welfare measures for women workers across different sectors:

Factories Act, 1948: Mandates facilities like canteens, restrooms, and crèches to support women workers’ health, hygiene, and childcare needs.
Building and Other Construction Workers Act, 1996: Requires provisions for first aid, clean toilets, canteens, and crèches at construction sites.
Beedi and Cigar Workers Act, 1966: Stipulates the provision of child care rooms for children under six at workplaces with a significant number of female employees.

MGNREGA: Provides for a dedicated worker to look after children of women working at project sites when there are five or more children under six.
Maternity Benefit Act, 1961: Ensures paid maternity leave and introduces provisions for crèches in businesses with 50 or more employees. Amendments in 2017 increased paid maternity leave to 26 weeks and included adoption and commissioning mothers.
Inter State Migrant Workmen Rules, 1980: Mandates separate facilities for migrant workers, including latrines, washing areas, and crèches.
Sexual Harassment of Women at Workplace Act, 2013: Requires the establishment of Internal Complaints Committees (ICCs) to address sexual harassment and mandates Local Complaints Committees (LCCs) in certain cases.
Employee State Insurance Act, 1948: Provides medical and cash benefits for various conditions, including maternity.
Employees' Provident Funds Act, 1952: Establishes a provident fund for retirement and financial security.
Trade Unions Act, 1926: Supports the formation of trade unions and collective bargaining, promoting gender inclusivity.

Industrial Disputes Act, 1947: Provides mechanisms for resolving disputes and protecting women’s job security during maternity.
Occupational Safety, Health, and Working Conditions Code, 2020: Addresses health, safety, and welfare, including provisions for night work, hazardous jobs, and transportation for female employees.
Code on Wages, 2019: Ensures equal pay for equal work and applies to all types of employment.
Code on Social Security, 2020: Extends social security benefits to all workers, including those in the unorganized sector.
Industrial Relations Code, 2020: Introduces fair representation for women in grievance redressal and includes provisions for fixed-term employment.

What are the key employee benefits mandated by Indian law?

Important labor laws providing employee benefits include:

Employees' State Insurance Act, 1948: Mandates social security benefits like sickness, maternity, disablement, and medical coverage for employees earning up to INR 21,000 per month (or INR 25,000 for disabled employees). Applicable to factories and establishments with 10 or more employees.
Employees’ Provident Fund & Miscellaneous Provisions Act, 1952: Requires establishments with 20 or more employees to contribute to the Employees' Provident Fund (EPF). Both employer and employee contribute 12% of the basic salary and dearness allowance. It also includes the Employees’ Pension Scheme and Employees’ Deposit-linked Insurance Scheme.
Maternity Benefit Act, 1961: Grants up to 26 weeks of paid maternity leave for women in factories and establishments with 10 or more employees. It also mandates crèche facilities in larger establishments and provides a medical bonus if no pre- and post-natal care is provided.

Payment of Gratuity Act, 1972: Provides a monetary benefit to employees upon separation, retirement, or in case of death or disability, based on 15 days' wages for each year of service.
Employees’ Compensation Act, 1923: Requires employers to compensate employees for death or injury caused by accidents or occupational diseases during employment, with specific conditions under which compensation is not required.

In addition, Code on Wages, 2019 states that the basic salary constitutes at least 50% of the total cost to company (CTC). Employers are also advised to maintain an Employee Handbook and HR Policy to ensure compliance with these regulations.

What are the entitlements for maternity leave under Indian law?

The Maternity Benefit Act of 2017 in India significantly extended the duration of maternity leave from 12 weeks to 26 weeks to better support working mothers. Relevant provisions are stated below-

Duration: Maternity leave is now 26 weeks, with the option to start up to 8 weeks before the expected delivery date, and the remaining leave taken after childbirth. For women with two or more surviving children, the leave is 12 weeks.
Payment: Women on maternity leave are entitled to full salary, providing financial support during their leave.
Job Security: The Act guarantees that women will be reinstated to their original positions with the same conditions upon returning from maternity leave.

Medical Benefits: Includes coverage for pre-natal and post-natal care expenses, ensuring comprehensive support for women’s health during and after pregnancy.

In this way, the Maternity Benefit Act of 2017 empowers women to create a healthy work-life balance.

What protections are in place against sexual harassment at work?

In 1997, the Supreme Court of India established the Vishakha Guidelines to address sexual harassment in the workplace, based on the Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW). These guidelines aimed to protect women from sexual harassment until specific legislation was enacted. Important provisions include:

Employers must prevent and address sexual harassment, creating processes for resolution and prosecution.
The guidelines define sexual harassment as unwelcome behavior of a sexual nature, including physical contact, requests for sexual favors, sexually colored remarks, and showing pornography.

Employers must set up a complaints committee, ideally led by a woman with at least half of its members being women. This committee should involve a third-party organization familiar with sexual harassment issues and maintain confidentiality.
Employers must educate employees about their rights and ensure support for victims, even if the harassment is committed by a third party.
Both Central and State Governments are responsible for ensuring compliance with these guidelines in the private sector.

The Vishakha Guidelines were largely incorporated into the Prevention of Sexual Harassment at Workplace Act, 2013. Differences include:

The Act does not allow out-of-court settlements involving monetary compensation.
It provides specific leave provisions for women who file complaints.

Conclusion

In India, workers have important rights to ensure fair treatment at work. The Code on Wages, 2019, sets a minimum wage that employers must pay, though it can vary by region and job type. The law also covers working hours, overtime pay, and benefits like provident funds and gratuity. Employees are entitled to maternity and paternity leave, and there are strong protections against workplace harassment under the Prevention of Sexual Harassment at Workplace Act, 2013. Knowing these rights helps employees ensure they are treated fairly and can take action if needed.

Frequently Asked Questions-

What should I do if I’m not paid the minimum wage?

If employees receive wages below the government-mandated minimum, they have the option to lodge a complaint with the labor inspectorate. This complaint can be submitted either by the worker themselves, through a legal representative, or via a representative from a registered trade union.

What should I do if I am forced to work beyond the legal limits?

If you are forced to work beyond the legal limits in India, first document your work hours and any instances of overwork. Familiarize yourself with relevant labor laws such as the Factories Act, 1948, and the Shops and Establishments Act. Report the issue to your employer or HR department, and if it remains unresolved, file a complaint with the local labor inspectorate or labor commissioner

What steps should an employee take if they experience sexual harassment?

If you experience sexual harassment in the workplace in India, you can take several key steps to address the situation. First, you have the option to file a complaint either through a private complaint with a Magistrate or an FIR at the local police station.

A private complaint can lead to more severe penalties for the harasser. Additionally, if your complaint is substantiated, you may be eligible to request compensation from the harasser, which could cover emotional distress, financial losses, and any impact on your career opportunities. Furthermore, you can ask the Internal Complaints Committee (ICC) to issue a restraining order against the harasser, preventing them from making decisions about your work performance.

Can minimum wage rates be negotiated?

While minimum wage rates are set by law and cannot be negotiated down, employers and employees can negotiate additional pay or benefits beyond the minimum wage. Negotiations should ensure that the base pay meets or exceeds the minimum wage requirements.

What if my employer offers additional benefits?

Additional benefits such as health insurance, bonuses, or housing allowances may supplement your wages, but they do not replace the requirement to pay at least the minimum wage. Your total compensation package should not be less than the legal minimum wage.

References-

Written by Priyanshi Gupta

Priyanshi is a first-year Law student at National Law University, Jabalpur, currently pursuing BALLB. My interests lie in exploring emerging areas of law. She is eager to delve into the impact of ever evolving technologies on the legal landscape.

What are my rights as an employee in India?

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