THE MINIMUM WAGES ACT, 1948

This blog is written by Sagili Bhavana Shree, a 2nd year student at Damodaram Sanjivayya National University.

INTRODUCTION

The Minimum Wages Act, 1948 was enacted to stabilize the economy and combat poverty. The act empowers the state to make laws to provide fair and reasonable remuneration to workers and prevent exploitation and abuse by their employers. The wages were fixed for both the skilled and unskilled workers. The central and state governments can regulate, review, and revise the minimum wages according to the changes in society to improve their standard of living in their respective jurisdiction. There is equal payment for both Men and Women.

BACKGROUND

The International Labour Organisation (ILO) has described minimum wage as the lowest sum that an employer must pay their workers for the hours worked in a specific timeframe, and this rate cannot be lowered through collective agreements or individual contracts. Approximately 90 member countries of the ILO adhere to the minimum wage provision. Accordingly, India enacted by adhering to the international standards for the needs of the people.

In India, the Minimum Wages Act of 1948 governs and oversees the payment of minimum wages. India boasts one of the most competitive labor cost structures in Asia, with a national-level minimum wage set at approximately INR 176 per day, totaling INR 4,576 per month. It’s important to note that this national-level wage can vary based on geographical location and other pertinent factors. India employs a complex method for determining minimum wages, categorizing nearly 2,000 different unskilled job types and over 400 employment categories, each assigned a minimum daily wage based on their respective roles.

OBJECT AND PURPOSE OF THE LAW

The primary objective of implementing a minimum wage is to safeguard workers against receiving excessively low compensation. It ensures that individuals earn a fair income for their labor, enabling them to maintain a basic standard of living. Additionally, it serves as a means to combat poverty and promote gender equality by eliminating wage disparities between men and women. This framework has been carefully crafted to complement and enhance other social and labor-related initiatives, such as collective bargaining, which establishes employment terms and working conditions.

PROVISIONS OF THE LAW

S.NO	IMPORTANT  PROVISIONS	SUMMARY
1.	PURPOSE OF THE ACT	This act provides for fixing minimum rates of wages  in certain employment.
2.	EXTENT	Extends to whole of India
3.	SECTION- 2  INTERPRETATION  CLAUSE.  SEC.2(e) DEFINITION OF  EMPLOYER  SEC.2(h) DEFINITION OF  WAGES  SEC.2(i) EMPLOYEE	Section 2(e) defines an “employer” as a person who  employs either directly or through another person  one or more persons as employes in a scheduled  employment as per this Act. This employer can work  on behalf of Government of India or any local  authority.  Section 2(h) defines “Wages”, and this means  remuneration which can be expressed in terms of  money which would be payable to a person in respect  of employment or work done in such employment.  Section 2 (i) defines “employee” as a person  employed for hire or reward or on temporary basis.  To do any work which may be skilled or unskilled,  manual or clerical, and such work is scheduled as per  this act.  Exception- Does not include any member of  armed forces.

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4.	SECTION- 3  FXING OF MINIMUM  WAGES	Appropriate government fixes minimum wages as  per the manner provided by the section. The wages  fixed can be for the whole state or part of it. The  government can review the wages, review must not  exceed 5 years from the previous fixation.  The government may fix minimum wages for  minimum time, minimum rate for a piece of work.  Minimum wages can be fixed based on type of  employment, class of worker, location of work etc.
5.	SECTION -4  MINIMUM RATE OF  WAGES	The minimum rate of wages should be fixed by the  government as per variation in the cost-of-living  index applicable to such workers.
6.	SECTION –5  PROCEDURE FOR FIXING  & REVISING MINIMUM  WAGES	The appropriate government would appoint  committees and sub committees to hold enquiry and  advise fixation and revision. The government by  notification publish proposal of notification of  minimum wages at least 2 months before the  notification of wages.
7.	SECTION- 10  CORRECTION OF  ERRORS	Appropriate government by notification in official  gazette correct clerical or arithmetical mistake any  time.
8.	SECTION –12   PAYMENT OF MINIMUM  RATE OF WAGE.	Employers are bound to pay not less than the  minimum rate of wage fixed by the appropriate  government.
9.	SECTION –13  FIXING HOURS FOR  NORMAL WORKING DAY	The appropriate government can fix the number of  hours for normal workday (including intervals), paid  off day, payment of wage on overtime rate if made to  work on off day.
10.	SECTION- 14  OVERTIME	If made to work beyond the workday hours employer  to pay overtime as fixed by government for each hour  of overtime
11.	SECTION-15  WAGE FOR WORKING  LESS THAN NORMAL  WORKING DAY HOURS	The employee is to get the full day’s wage unless the  employee was unwilling to work or in cases and  circumstances as may be prescribed.
12.	SECTION-20  CLAIMS	The appropriate government to appoint  Commissioner for Workmen Compensation or any  other officer like Judge of Civil Court or stipendiary  Magistrate to be the Authority to hear and decide  claims in specified area arising out of payment of less  than minimum wage and other associated claims.

		Claims can be put forward by an employee or any  legal practitioner or official of the trade union  authorized in writing. Or any Inspector or any person  acting with permission. The application should be  presented within six months of the date when the  wages become due.
13.	SECTION –21  APPLICATION	Claims of several workers can be dealt with in a  single application.

PENAL PROVISIONS

S.NO	PENAL  PROVISIONS	SUMMARY
1.	SECTION –22  PENALTIES FOR CERTAIN  OFFENCES	If an employer pays less than minimum wage  or contravenes any rule under section 13 the  employer shall be punishable with fine of up  to Rs. 500/- or up to six months imprisonment  or both.
2.	SECTION –22B  COGNIZENCE OF OFFENCE.	No court shall take action if the application is  not granted by an officer authorized by the  appropriate government.
3.	SECTION- 22C  OFFENCES BY COMPANIES	Person responsible to the company for  conduct of the business that caused the  offence shall be deemed guilty and liable to  be proceeded against
4.	SECTION- 23  EXEMPTION IN CERTAIN  CASES	If employer proves offence was done despite  due diligence or offence was done without  knowledge, consent or connivance.

SIGNIFICANCE OF THE ACT

The Minimum Wages Act of 1948 holds significant importance for several reasons. Firstly, it serves the vital purpose of setting and periodically revising minimum wage rates for employees. This ensures that workers are guaranteed a fair income. Secondly, it aims to secure a decent living wage for all laborers, benefiting the overall public interest.

Additionally, the Act plays a crucial role in determining the daily working hours of employees, preventing their exploitation by employers, and ensuring that workers can maintain a respectable standard of living. It seeks to provide for their basic physical needs, promote good health, and offer a certain level of comfort.

Furthermore, the Act includes provisions for penalizing employers who fail to provide the mandated minimum wages to their workers. It also establishes advisory boards to oversee and implement the Act’s provisions effectively. Lastly, the Act outlines the powers and duties of inspectors appointed to enforce its provisions, contributing to the fair and just treatment of employees.

CRITICISM AND LIMITATION

The Minimum Wages Act, like any legislation, has its limitations and challenges. Here are some of the key limitations associated with the Minimum Wages Act:

1. Enforcement Challenges: One of the primary limitations is the difficulty in enforcing minimum wage laws, especially in sectors with a large informal labor force. Employers may attempt to evade compliance, making it challenging for authorities to monitor and ensure adherence.
2. Regional Disparities: The Act may not adequately address regional variations in living costs. Minimum wage rates set at the national or state level may not reflect the actual cost of living in specific regions, leading to wage inadequacy in high-cost areas.
3. Inflation Impact: The Act’s requirement to revise wages every five years may not keep pace with inflation, potentially eroding the real value of minimum wages over time. Workers may find it increasingly challenging to meet their basic needs with stagnant or slowly increasing wages.
4. Limited Coverage: The Act may not cover all categories of workers, particularly those in the informal sector, agricultural sector, or domestic work. These workers may remain unprotected and receive wages below the minimum standard.
5. Informal Labor Market: A substantial portion of the labor force in many countries, including India, operates in the informal sector, where employment arrangements are often less formalized. Enforcing minimum wage laws in this sector can be particularly challenging.
6. Compliance Burden on Employers: Employers, especially small and medium-sized businesses, may face administrative burdens when implementing minimum wage requirements, such as record-keeping and wage adjustments.
7. Impact on Employment: Critics argue that setting higher minimum wage rates can lead to job loss, as businesses may reduce their workforce or cut back on hiring to compensate for increased labor costs.

CONCLUSION

The Minimum Wages Act of 1948 was put in place to protect the rights and welfare of employees engaged in specified categories of employment identified by the Act. Its primary objective is to ensure fair employment opportunities and reasonable compensation to enable workers to maintain a respectable quality of life. The Act includes provisions, such as regular wage revisions every five years and the establishment of standard working hours, aimed at preventing the unjust exploitation of workers.

Furthermore, the Act institutes advisory boards and committees to which workers can turn for assistance in cases of unpaid or delayed wages by their employers. It also grants inspectors the necessary authority to oversee and promote the well-being of workers.