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FREQUENTLY
ASKED QUESTIONS
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MINIMUM
WAGES AS PER LAW
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Yes, there is a separate minimum
wage legislation in India. Minimum Wages Act, 1948 is an Act to provide for
fixing minimum rates of wages in certain employments and it extends to the
whole of India.
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Do one or more minimum wage/s,
exists in India?
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There exists more than one minimum
wages in India. As per Section 2 of the Act and Section27, 28 it is mentioned
that State as well as Centre has the power to form Minimum Wage rates
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At what level are minimum wage
determined?
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In India, minimum wages are
declared at national, regional, sectoral and occupational or skill level. As
per Section 3 of the Act minimum rates of wages may be fixed at national
& state level. Also, Section 3 (3) of the Act specifies that minimum
rates of wages may be fixed for different skills and occupations
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On what basis is/are minimum
wage/s declared?
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Minimum wages in India is declared
on daily, hourly, and monthly basis. As per section 3 (b) of the Act defines
that Minimum Wages are as per the piece rate, hour rate, and monthly rate as well
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In case of daily/weekly/monthly
minimum wage, are number of working hours considered while fixing minimum
wages?
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As per Section3 (14) (b) of the
Act there has not been any specific time period. But may be in accordance to
the period fixed under section 4 of the Payment of Wages Act, 1936 (4 of
1936)
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Who all are involved in setting
minimum wages?
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As per Section 9 of the Act
uprating are based on decision jointly made by the Government, employer and
trade union representatives
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How are upratings (adjustments) of
minimum wage/s decided upon?
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As per Section 9 of the Act
uprating are based on decision jointly made by the Government, employer and
trade union representatives
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Which are the components of
minimum wages in India?
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Minimum wages in India has both
fixed and variable component. Section 4 mentions that minimum wages may be
inclusive of basic pay and with special allowance on which it is based.
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How frequently is the fixed
component of minimum wages updated?
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Fixed component of minimum wages
are updated in more than 2 years. Section 3 of the Act mentions that the
period for revision of fixed component of minimum wages can be anywhere
within 5 years of its fixation.
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How frequently is the variable
component of minimum wage updated?
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variable component of minimum
wages are updated at irregular time lags. Section 4 of the Act mentions that
the special allowance rate should be adjusted at such intervals and in such
manner as the appropriate government may direct
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What are the yardsticks on which
minimum wage revisions are based?
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Section 4 of the Act mentions that
Minimum wages are based on basic wages and cost of living index. The
yardsticks on which minimum wage is revised are: (a) Three consumption
units per earner, (b) Minimum food requirement of 2700 calories per average
Indian adult, ( c ) Cloth requirement of 72 yards per annum per family, (d)
Rent corresponding to the minimum area provided under the Government's
Industrial Housing Scheme (e) Fuel, lighting and other miscellaneous items of
expenditure to constitute 20 % of the total Minimum Wages (f) Children
education, medical requirement, minimum recreation including
festivals/ceremonies and provision for old age, marriage etc. should
further constitute 25% of the total Minimum Wage.
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What is the national poverty line?
(In national currency)
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The national poverty line is Rs.
356.30 in rural areas and Rs. 538.60 in urban areas, per capita per month as
updated by all-India poverty lines 2004-05
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How often is poverty line updated?
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This scheme is included under Five
Year plan as per the Planning Commission of India. Hence, poverty line is
updated in every 5 years.
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When was poverty line last
updated?
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Poverty line was last updated in
the year 2004-2005
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What is the percentage of minimum
wage relative to the current poverty line?
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The percentage of minimum wage
relative to the current poverty line is 581.65% (100*26/447*100). National
Floor level of minimum wage (Rs 100 per person per day) has been used to calculate
this figure. In order to derive monthly minimum wage, Minimum
Wage rate is multiplied by 26 (number of work days in a month). National
poverty line is calculated by taking an average of the rural and urban
poverty line (Rs 447 per person per month).
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How is minimum wages compliance
regulated?
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As per section 19 of Minimum Wages
Act, 1948 the appropriate government may by notification in the Official
Gazette appoint such persons as it thinks fit to be Inspector for the
purposes of this Act and define the local limits within which they shall
exercise their functions.
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Which legal sanctions can be
applied if compliance is lacking?
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In case of non compliance, fines,
imprisonment and payment of arrears can be applied as per law. Section 22 of
the Act mentions that if any one contravanes the rules formed under the
Act he may be punished to pay fine, imprisonment which may extend to period
of six months or payment of arrears by the employer to the employee.
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Are employer and/or trade union
representatives involved in compliance procedures?
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Information pertaining to this is
not specified in the Minimum Wage Act.
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To whom/where can individuals
complain, if they think they are earning less than minimum wages.
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In case individuals earn less than
specified minimum wages, they can complain to Labour Inspectorate coordinates
or Trade Union Coordinates. As per section 19 of Minimum Wages Act, 1948,
government may appoint such person as it thinks fit to be Inspectors for the
purposes of this Act. As per section 20 (2) of Minimum Wages Act, 1948 it
mention that employee can make complain in writing by himself or through any
legal practitioner or any official of a registered trade union
authorised to act on his behalf or any Inspector or any person acting
with the permission of the authority
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