Minimum Wages Act, 1948
Minimum Wages
As per the Indian Constitution, 'Minimum Wage' has been defined as the level of income
for skilled and unskilled workers which ensures a sustaining standard of living while also
providing for some measure of comfort.
A minimum wage not just supports the bare level of employment, but also seeks for viable
continuous improvement. It aims at preventing exploitation of labour.
Fixation and Revision of Minimum Wages
Under the Minimum Wages Act, 1948, both Central and State government have control over fixing
the wages.
The State governments fix their own scheduled employments and further release the rates of
Minimum Wage along with the VDA (Variable Dearness Allowance).
Wage boards are set up to review and fix minimum wages at specified intervals.
The wage rates in scheduled employments differ across states, sectors, skills, regions and
occupations owing to a lot of differentiating factors. Hence, there is no single uniform minimum
wage rate across the country and the revision cycle differs for each state.
Scope and Applicability
Minimum Wages Act was enforced to ensure the employers did not exploit employees with
insufficient wages.
The Act is applicable on all establishments, factories, place of business and industry types.
The Act is applicable to all states including J&K
Unscheduled industries are generally excluded, though a state can add a minimum wage for an
occupation or specify it for a sector during a revision cycle.
Minimum Wages – Skill Definitions
1. Unskilled: An unskilled employee is one who does operations that involve the performance of simple duties, which require
the experience of little of no independent judgment or previous experience although familiarity with the occupational
environment is necessary. His work may thus require in addition to physical exertion familiarity with variety of articles or
goods.
2. Semi-skilled: A semiskilled worker is one who does work generally of defined routine nature wherein the major
requirement is not so much of the judgment, skill and but for proper discharge of duties assigned to him or relatively
narrow job and where important decisions made by others. His work is thus limited to the performance of routine
operations of limited scope.
3. Skilled: A skilled employee is one who is capable of working efficiently of exercising considerable independent judgement
and of discharging his duties with responsibility. He must posses a thorough and comprehensive knowledge of the trade,
craft or industry in which he is employed.
4. Highly Skilled: A highly skilled worker is one who is capable of working efficiently and supervises efficiently the work of
skilled employees.
Minimum Wages – Working Hours
Working Hours
Days per week specified: 6.0
Hours per week specified: 48
Wages per month are calculated as 4.33 times if a weekly wage is defined. It is calculated as 4.33
times the standard hours per week if an hourly wage is given.
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Minimum Wages – OT Calculation
OT Wage hours = [B+DA] X [OT Hours] X 2
8 X 26
OT Wage Days = [B+DA] X [OT Days] X 2
26
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Consequences of Non-Compliance
Under-payment and non-payment of Minimum Wage is deemed as an offence
under the Central Act. The penalty may range from upto 5 years imprisonment
and a fine of Rs. 10000/- (under Section 22 of the Act).
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