India is facing a rise in unemployment rate similarly to any other developing country, and Covid-19 and lockdown worldwide boosted it.
Companies or business houses finding it hard to survive in the market started firing their employees or reduced their wages up to 50% and kept it as it is even after lockdown and the market is rebounding.
Here comes the role of the minimum wages act, 1948, which stipulates minimum wages in India for both skilled and unskilled labourers.
The act ensures a basic income level that guarantees a minimum standard of living with good health, education, dignity and provides for any contingency.
It provides categories for fixing of minimum wage, the role of wage committee and advisory board.
It also provides for the punishment for non-compliance with the minimum wages act,1948.
Minimum wages act, 1948
The minimum wages act, 1948 ensures the basic standard of life, health, education and other needs.
Objectives
- To ensure that the employees can have the basic needs fulfilled with a normal lifestyle having a basic level of comfort.
- To ensure adequate wages for all labourers in the public interest.
- To ensure that employee has enough earning to provide a basic standard of living for his family with primary education and healthcare and,
Fixing of minimum rates of wages
The appropriate government has the power enshrined under section 3 to fix the wages rates payable to the employees having employment under parts I and II of the schedule or any other employment added to any part by notification under section 27 of this act.
There are four types of wages defined under section 3(2) of the minimum wages act, 1948:-
- Minimum time rate- a minimum rate of wages for time work
- Minimum piece-rate- a minimum rate of wages for piece work
- Guaranteed time rate- a minimum rate of remuneration on a time work basis
- Overtime rate- a minimum rate to apply in respect of overtime work done by employees
While fixing minimum wage rates for different components shall be considered in section 3(3)(a) of the act. These include:
- Different scheduled employments
- Different work classes in the same scheduled employment
- Children, apprentices, adults, and adolescents
- Different localities
While section 3(3)(b) also prescribes the periods according to which wages get fixed. These include:-
- By the hour
- By the day
- By the month
The minimum rate of wages
These minimum rates of wages get defined under section 4 of this act.
Any wages’ minimum rates fixed or revised by the government concerning scheduled employments under section 3 may consist of:-
- a basic wages rate and a special allowance at a rate adjusted as per government direction. It gets done to meet with the variation in the living cost index number applicable to such workers (in the future referred to as the “cost of living allowance”); or
- a basic rate of wages with or without the living allowance cost, and the cash value of the concessions concerning supplies of essential commodities at concessional rates, where so authorised, or
- an all-comprehensive rate, allowing for the basic rate, living allowance cost and the cash value of the concessions.
This cost of the living index number is defined under Section 2(d), “cost of living index number”, concerning employees in any scheduled employment regarding which minimum rates of wages get fixed.
“It means the index number ascertained and declared by the competent authority by notification in the Official Gazette to be the cost of living index number applicable to employees in such employment”.
