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FAQs On Minimum Wages

 

Q.What is Minimum Wage Check ?

Ans: Minimum Wage Check gives the latest Minimum Wage rate of all Indian states.


Q.How is Minimum Wage rate fixed in India ?

Ans: Under Section 5 of Minimum Wages Act, 1948 there are basically two method of fixation/revision of Minimum Wages (1) Committee Method (2) Notification Method. Revision of Minimum Wages should not exceed an interval of 5 years. Section 3 empowers appropriate Government to fix the minimum rates of wages in the scheduled employments.


Minimum rate of the wages fixed or revised consists of the following:
  • A basic rate of wages and a special allowance, viz., cost of living allowance;
  • A basic rate of wages with or without cost of living allowance and cash value of concessions for supplies of essential commodities;
  • An all inclusive rate, i.e. basic rate, cost of living allowance and cash value of concessions.

 

The Minimum Wage rate may be fixed at a) time rate, b) piece rate, c) guaranteed time rate and d) overtime rate.

The Act provides that different Minimum Wage rate may be fixed for a) different scheduled employments, b) different works in the same employment, c) adult, adolescent and children, d) different locations or e) male and female.

Also, Government may fix such Minimum Wage by a) an hour, b) day, c) month, or d) any other period as may be prescribed by the notified authority.


Norms for fixing Minimum Wage:
  • Three consumption units per earner,
  • Minimum food requirement of 2700 calories per average Indian adult,
  • Cloth requirement of 72 yards per annum per family,
  • Rent corresponding to the minimum area provided under the Government's Industrial Housing Scheme and
  • Fuel, lighting and other miscellaneous items of expenditure to constitute 20 % of the total Minimum Wages
  • Children education, medical requirement, minimum recreation including festivals/ceremonies and provision for old age, marriage etc. should further constitute 25% of the total Minimum Wage.


Cost of Living Allowance:
The Minimum basic wages fixed are linked to consumer price index as a counter measure against inflation. The cost of living is set twice in a year. The Commissioner of Labour notifies the rate 1st of April and 1st of October. The rates are fixed on the basis of the average rise in the State industrial workers consumer price index numbers for half year ending December and June respectively.


Variable Dearness Allowance:
Dearness Allowance is payable to monthly, daily and piece rate earners. Every six months the respective State Governments issues the Cost of Living Index number for each and every scheduled employment.


Q.What are the duties of employer under Minimum Wages Act, 1948 ?

Ans: The employer must pay every employee wages as fixed by the Government.

(a) Wages must be paid in cash (current coins or currency notes, or both)/ after obtaining the authorization, it can even be paid either by cheque or by crediting the wages in employee’s bank account.

(b) For the fixation of Minimum Wages, the employment must have been in Schedule originally or added to the Schedule by a notification under Section 27 of the Act.

(c) The employer can take actual work on any day up to 9 hours in a 12 hours shift, but he must pay double the rate for any hour or part of an hour of actual work in excess of 9 hours or for more than 48 hours in any week.

(d) Once a Minimum Wage is fixed according to the provisions of the Act, the employer must pay to every employee engaged in a Scheduled employment, Minimum Wages notification for that class of employees.

(e) The employer should fix wage-period for the payment of wages at intervals not exceeding one month or such other larger period as may be prescribed.

(f) Where less than 1000 persons are employed, it would be paid before the expiry of the 7th day of the following month. And where more than 1000 workers, it would be paid before the expiry of the 10th day of the following month.

(g) The employer should pay the wages to a person discharged not later than the second working day after his discharge.

(h) Every employer should maintain a register of wages at workplace specifying the following particulars for each wage period in respect of each employed person:

          i. Minimum rate of wages payable;

         ii. The number of days in which overtime was worked;

         iii. The gross wages;

         iv. The wages actually paid and the date of payment.

(i) Every employer should get the signature or the thumb impression of every person employed on the wage book and the wage slips.

(j) The employer should exhibit at main entrance to the establishment and its offices, a notice in respect of the following in English and local language:

          i. Minimum rate of Wages;          

         ii. Abstracts of the Acts and rules made there under;         

         iii. Name and address of the Labour Inspector/ Asst. Commissioner of Labour etc.


Q.What is Variable Dearness Allowance ?

Ans: It was recommended in the Labour Ministers' Conference held in 1988, to evolve a mechanism to protect wages against inflation by linking it to rise in the Consumer Price Index. The Variable Dearness Allowance came into being in the year 1991. The allowance is revised twice a year, once on 1st April and then on 1st October. In the State Sphere, 26 States/Union Territories have provisions for Variable Dearness Allowance, at present.


Q.How is Minimum Wage data collected by Paycheck

Ans: Minimum Wage data is collected from State Labour Departments in India.


Q.How often is Minimum Wage data updated by Paycheck India ?

Ans: The revised Minimum Wage data for all Indian states is regularly updated on the Paycheck website. All efforts are made to update the Minimum Wage data on a regular basis. However, there might be unforeseen errors.


Also see: Minimum Wages in India

 

 

 

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