The Minimum Wages Act, 1948
The Minimum Wages Act, 1948, came into force on March 15, 1948. It aims to fix minimum rates of wages for workers in ‘scheduled employments’. Wages are defined as remuneration – which can be expressed in terms of money – payable to an employed person, for work done as per the terms of their contract of employment.
The Act extends to the whole of India.
What are ‘scheduled employments’?
‘Scheduled employments’ comprise of employment in any woollen carpet-making or shawl weaving establishment; in rice, flour or dal mills; in tobacco and beedi making factories; in plantations or any estate maintained for growing cinchona, rubber, tea or coffee; in oil mills; under any local authority; for the construction or maintenance of roads, runways and buildings; in stone breaking and crushing; in lac factories; in ‘mica works’; in public motor transport; and in tanneries and leather manufacturing.
The Act also lists employment in mines of gypsum, barytes, bauxite, manganese, china clay, white clay, kyanite, copper, steatite, stone, ochre and asbestos; and other clay and magnesite mines covered under the Mines Act, 1952.
What does the Act say about fixing the minimum rate of wages?
The ‘appropriate Government’ (central or state) shall fix or revise the minimum rates of wages payable to employees in scheduled employments. They may fix separate wage rates for different scheduled employments; classes of work in the same scheduled employment, and localities; and for adults, children, adolescents and apprentices. Governments may fix rates of wages by the hour, day, month or other periods, as may be prescribed.
Minimum wages shall consist of a basic rate of wages, the cash value of concessions provided to an employee as prescribed by the ‘appropriate Government’, and a ‘cost of living allowance’. The cost of living allowance is to be adjusted at such intervals as the ‘appropriate Government’ may direct, “to accord as nearly as practicable with the variation in the cost of living index.”
What does the Act say about wages paid in kind?
Under this Act, minimum wages shall only be paid in cash. Wages shall not include accommodation, electricity and water supply, ‘medical attendance’, or any other amenity or service provided to an employee which is specified by the government; the wages not include the employer’s contribution to any social insurance scheme, pension or provident funds, or gratuity payable on the employee’s discharge; nor do they include traveling allowances or concessions. Wages cannot comprise of “any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment.”
However, the ‘appropriate Government’ may authorise the payment of minimum wages either wholly or partly in kind where such payments are a ‘custom’. The cash value of wages in kind shall be estimated in a prescribed manner.
What is the procedure for fixing and revising minimum wages?
The ‘appropriate Government’ shall fix or revise the minimum rates of wages in any scheduled employment through a notification in The Gazette of India.
Governments may appoint as many committees and sub-committees as they consider necessary to advise them on fixing or revising minimum wage rates. An Advisory Board shall be appointed in order to coordinate the work of such committees and sub-committees.
Committees, sub-committees and the Advisory Board shall consist of persons representing employers and employees of the scheduled employment, in equal number, and at least a third of the total number of members should comprise of ‘independent persons’. The ‘appropriate Government’ shall appoint an independent person as the chairperson of the committee, sub-committee or Advisory Board.
What does the Act specify about work hours?
The ‘appropriate Government’ may fix the hours of work for workers in scheduled employments for a ‘normal working day’, including one or more intervals for rest. The government shall provide for a day of rest for every seven days of work, and the wages for this day shall not be less than the overtime rate.
What are the penalties for contravening the Act’s provisions?
Employers who do not pay minimum wages to an employee, or contravene any provisions of this Act, shall be punishable with imprisonment for up to six months, or a fine of up to Rs. 500, or both.
Focus and Factoids by Abhaya Ganashree.
Ministry of Law and Justice
Government of India, New Delhi
15 Mar, 1948