CONCEPT OF WAGES

TYPES OF WAGES
1. Floor Wage
2. Minimum Wage
3. Fair Wage
4. Living Wage
The Fair Wages Committee defined wages as having three tiers:
minimum wage is the lowest level to ensure the worker's survival and
preserve their efficiency,
fair wage is a level between the minimum and living wage, determined by
the industry's capacity to pay, and
living wage is the highest level, which allows a worker and their family to live
with dignity and comfort.
FLOOR WAGE
• Lowest possible minimum wage that cannot be undercut, serving as a
national or regional minimum payment floor below which no employer can
pay workers

• Set by Central Govt

• It was a non-statutory National Floor Level Minimum Wage (NFLMW)

• now a statutory provision under the Code on Wages, 2019, which requires
minimum wages to be no lower than the floor wage. (S. 9)
Minimum Wage
• The lowest wage an employer must pay, sufficient for the worker's
bare sustenance and to maintain their efficiency.
• Earlier it referred to bare subsistence – Food, Clothing & Housing
• Fair Wage Committee - It must also provide for some education,
medical needs, and amenities.
• Set by every State govt
Floor Wage v. Minimum Wage
FLOOR WAGE MINIMUM WAGE

Purpose To act as a national baseline wage below To provide a legally mandated

Criteria Based on the minimum living standards Takes into account factors like skill of
of workers the worker, difficulty of the work, and
cost of living.

Legality n the context of India's Code on Wages, it The legally enforceable rate that
is a legal concept that state-level employers must pay; it cannot be
minimum wages cannot be lower than. reduced to a level below the floor
wage.
LIVING WAGE
• Not defined…defined in Australian case
• Article 43 of the Constitution of India
• The highest level of wage, which provides for the worker's and
family's needs to a greater extent than the minimum wage.
• It is intended to provide for all material things needed for health and
well-being, and to maintain the worker in the highest state of
industrial efficiency.- Necessary for decent standard of living
• Fair Welfare Committee – Not possible to fix in present economic
condition of country
FAIR WAGE
• A wage that is above the minimum wage but below the living wage
• Mean of Minimum wage (Lowest Amount) & Living wage (Highest
Amount)
• The Fair Wages Committee - It should be influenced by the industry's
capacity to pay, the prevailing wage rates in similar industries, and the
cost of living.