Background of Minimum Wage

India's Minimum Wages Act, a significant legislative development, was introduced in 1948. This act bestowed the Central and State governments with the authority to set minimum wages. Wage Boards were established to assess the industry's financial capacity and set minimum wages that could meet the basic needs of a family of four, including calories, shelter, clothing, education, medical assistance, and entertainment. The act's implementation led to varying wage rates in scheduled employment across states, sectors, skills, regions, and occupations, reflecting differences in living costs, regional industries' capacity to pay, and consumption patterns. This complex structure, however, has led to the absence of a single uniform minimum wage rate across the country.

Meaning, scope and applicability of Minimum Wage Act

The concept of 'scheduled employment' is a key aspect of the Minimum Wage Act. It refers to specific industries, establishments, and contractors that are subject to the act's provisions. The minimum wage, the lowest wage set by the appropriate state government, is payable by an employer to an employee engaged in scheduled employment. The act applies to all such industries, establishments, and contractors. The minimum wage is fixed or revised by the appropriate government, based on the advice of appointed committees and in consultation with an advisory board.

Procedure of fixing and revision of minimum wages

When it comes to fixing or revising minimum rates of wages for any scheduled employment, the state government plays a pivotal role. It appoints committees or sub-committees to conduct inquiries and provide advice on the matter. The state government also publishes its proposal in the official gazette, specifying a date for its consideration. After considering the advice of the committee and all representations received, the state government finalizes the minimum rates of wages for scheduled employment through a notification in the Official Gazette.

Type of Minimum Wage

  1. A minimum time rate
  2. A minimum piece rate
  3. A guaranteed time rate
  4. A minimum rate with respect to overtime work ÔÇťovertime rate.

Consequence of non-compliance

  1. Any employer who pays any employee less than the minimum wage or contravenes any rule or order shall be imprisoned for up to six months or a fine of up to five hundred rupees or both. However, this provision varies from state to state


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