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Minimum wages

 Minimum wages

Written by- Shalini Bishi


Labour laws in India consist of significant legislations such as the Industrial Dispute Act, 1947, Payment of Bonus Act, 1965, Workmen Compensation Act, 1923, Minimum Wages Act, 1948, etc. In the Indian Constitution, labour laws fall under the Concurrent List, which gives power to both Central and state governments to legislate and make rules on the matter. These legislations play significant roles in protecting the rights and interests of the workers, providing employment opportunities to the workers, protecting employees from exploitation, creating a healthy work environment, etc.
The wages that must be received by an employee from the employer must be as provided in this Act. In this case, the wages are statutory.
Employers found the legality of the Act to have violated their constitutional rights, as enshrined in Article 19 (g) of the Constitution. The Supreme Court of India ruled, however, that the Minimum Wages Act of 1948 complied with the constitution in accordance with the principles of state policy guidelines laid down in Article 43 of the Constitution.

What Is The Minimum Wages Act 1948?

The Minimum Wages Act 1948 is a legislative labor law that stipulates wages for both skilled and unskilled laborers in India.
It came to bring equality and justice to the blue-collar people.  Pay fixing experts were guided by the standards recommended by the Fair Wage Committee in the settlement of issues identifying with wage problems in organized industries.
The Minimum Wages Act, 1948 is a social welfare legislation that aims to provide a basic minimum wage rate to workers employed in various industries, trades, and occupations. The act defines the minimum wages payable to employees in different sectors, with the objective of ensuring that workers receive adequate compensation for their labor.

The act requires employers to pay their employees at least the minimum wage rate set by the government. The minimum wage rate is determined by taking into account various factors such as the nature of the work, skill required, cost of living, and the capacity of employers to pay.


The concept of minimum Wages was first Evolved by ILO in 1928 with reference to remuneration of workersin   those   industries   Where   the   level   of   wages   was   substantially   low   and   the   labor   was   vulnerable   toExploitation, is not well organized, and had less effective bargaining power.In India, the Need for the fixation of minimum Wages arose after World War – II when a draft bill wasconsidered by The Indian Labor Conference in 1945.On the recommendation of the 8th Standing Labor Committee, the Minimum Wages Bill was introduced inthe Central Legislative assembly on 11.4.1946 and came into force on 15.03.1948. It came on the StatuteBook as The Minimum Wages Act,1948.For the latter, the Government of India appointed the ‘Committee on Fair Wages’ to determine the principleson which fair wages.

According to the Fair Wage Committee,    and Hydro    (Engineers) P. Ltd v.  Workmen. AIR 1969 SC182.    The minimum wage was ‘to ensure not merely the bare sustenance of life but the preservation of the efficiencyof the worker by providing some measure of education, medical requirements and amenities.

Objective of the Act

There were several objectives that this Act needed to ensure:

1.Minimum wages need to be ensured to all blue-collar workers in the organized sector.

2.Prohibition of exploitation of labour in the workplace.

3.The Act would empower the government to fix minimum wages and revise those wages from time to time according to the economic situation of the country.

4. To ensure the application of this Act to a maximum number of organized sector employers.
The Honourable Supreme Court in Chandra Bhavan Boarding and Lodging Bangalore v. the State of Mysore and Another,[1] laid down the purpose of the Act. Its main objective is to prevent sweated labour as well as the exploitation of unorganized labour. It proceeds on the basis that the State must see that at least minimum wages are paid to the employees irrespective of the capacity of the industry or unit to pay the same.


1  To safeguard that the employee has a basic physical necessity, proper health, and comfort.
  2  Ensure that the labor gets fair wages.
3  To ensure that the labor lives a decent life and have a respectable name in society.

Constitutional Recognition

The Constitution of India embodies the concept of minimum wages in Part IV, i.e., the Directive Principles of the State Policy. It is enshrined firstly, under Article 39, according to which states should ensure that all citizens have the right to an adequate livelihood and that there is equal pay for equal work for both men and women. Secondly, under Article 43, the State’s obligation to protect through both legal and economic means the citizen’s right to work for a dignified living wage, i.e., a wage capable of providing a decent living standard is enshrined.

Features of the Act

1.The Act applies to the employments listed in the schedule. Therefore, the governments at the State and Central level has to fix the minimum wage. They should also add any employment to the schedule if they satisfy the criteria of 1000 workers, at least.

2.The Act lays down for fixation of the following:
A minimum time rate of wages
A minimum piece rate
A guaranteed time rate and
An overtime rate
For various occupations, localities or classes of work and adults, adolescents, children, and apprentices.

3. The minimum rate of wages consists of :

A basic rate of wages and the cost of living allowance or
A basic rate of wages with or without the cost of living allowance and the cash value of the concessions in respect of essential commodities supplied at concessional rates.
4. The Act lays down that payment of wages be in cash. However, it empowers the appropriate Government to authorize the payment of minimum wages either wholly or partly in kind in particular cases.

5. The appropriate Government is empowered to fix the number of hours of work per day, to provide for a weekly holiday  and the payment of overtime wages.

6. The establishments are required to maintain registers and office records as prescribed.

7. The Inspectors are appointed to hear claims arising out of payments.

8. The appropriate Government has to revise the minimum wages every five years.

9. The appropriate Government has to provide special allowance once in six months.

10. On non-payment of wages, section 20 will be applicable. The authority has to pay ten times the difference amount for defaulting.

Important provision of this act

1. Minimum rates of wages

Under Section 3 of the Act, the minimum wages payable to the employees are to be fixed by the appropriate government. However, this Section also mentions that the rate of wages shall be revised every five years. The appropriate government may fix:

The minimum rate of wages for time work,
the minimum rate of wage for piece work,
a minimum rate of remuneration to apply in the case of employees employed on piece work for the purpose of securing to such employees a minimum rate of wages on a time work basis,
a minimum rate of wage to substitute the for the minimum rate which would otherwise be applicable, in respect of overtime work done by employees.
In fixing or revising minimum wages under Section 3 of the Act:
Different minimum rates of wages may be fixed for; different classes of work, different scheduled employment, different localities, different age groups, etc.Minimum wages may be fixed by the wage period such as; by the hour, by the day, etc.

Section 4 of the Minimum Wages Act, 1948 states that the minimum wages fixed by the appropriate government must consist of:A basic rate of wages and a special allowance must be adjusted at necessary intervals by the appropriate government to match the cost of living of the employees. The cost of living allowance and the cash value of the concessions in respect of supplies of essential commodities must be computed by a competent authority and at such intervals specified by the appropriate government.

Section 5 states that in order to fix or revise the minimum wage of the employees the appropriate government may establish as many committees and subcommittees necessary to hold enquiries in matters regarding fixing and revision of minimum wage. Further, the appropriate government by notification to the Official Gazette publish its proposal for the information of the individuals who are likely to be affected by such information and thereby specify the date which must not be less than two months from the date of notification of the proposals that will be taken into consideration.

2 . Advisory board

Under Section 7 the appropriate government must appoint advisory boards for coordinating the work of the committees and subcommittees mentioned in Section 5 and also for advising the appropriate government generally in the matter of fixing and revising minimum rates of wages.

Central Advisory Board

In the matters of fixation and revision of minimum rates of wages of the employees, the Central Government shall appoint a Central Advisory Board. The Central Advisory Board shall consist of:
Members to be nominated by the Central Government representing employers and employees in the scheduled employment, who shall be equal in number, and
Independent persons not exceeding one-third of its total number of members. One such member shall be appointed as the Chairperson by the Central Advisory Board

3. Wages in kind under the Act

Section 11 of the Minimum wages Act, 1948 mentions how the wages will be payable to the employees.Minimum wages under this Act shall be paid in cash.
The appropriate government under necessary circumstances by notification to the Official Gazette authorise the payment of the minimum wages either wholly or partly in kind.The appropriate government by notification to the Official Gazette authorised a provision for the supply of essential commodities at concession rates.
The payment of wages to the employees under this Act should be done in accordance with Section 12 of the Act, which states that the employer shall pay the minimum rate of wages fixed to every employee working under him within such time and manner prescribed under the Act.

4. Inspectors

In this Act according to section 14 of the  the appropriate government by notification to the official gazette shall appoint inspectors in a manner prescribed under the Act. The inspectors shall be liable to exercise their functions within the local limits of their jurisdiction.
The inspectors shall enter the premises or places within the local limits of their jurisdiction where the employees are employed to work in respect of which minimum rates of wages have been fixed under this Act, for the purpose of examining the register, record of wages, etc.To examine any person on the premises or places who is an employee. Seize or take copies of registers, records of wages, or other required documents under this act which he may consider relevant in case of commission of any offence.

5. Claim

An application under Section 20 of the Minimum Wages Act, 1948 is made to the authority, the authority shall give adequate opportunities of being heard to both the applicant and the employer. Under this Section, every direction of the authority shall be binding and final. The authority appointed under the Act shall have the powers of a civil court under the Code of Civil Procedure, 1908 for the purposes of taking evidence, enforcing the attendance of witnesses, production of documents, etc.

6. Penalties

Penalties for offences
Section 22 of the Minimum Wages Act, 1948 an employer who fails to provide minimum rates of wages to the employees or contravenes any rule or order made under Section 13 of the Act shall be punished with imprisonment for a term which may extend to six months or fine not less than five hundred rupees or both.


The act  empowers the government to set up committees to review and revise the minimum wage rates periodically, with the aim of ensuring that the wages paid to workers keep pace with the cost of living and the economic development of the country.The act also provides for the enforcement of the minimum wage rates and prescribes penalties for violations of its provisions.

In summary, the Minimum Wages Act, 1948 is a significant piece of legislation that seeks to protect the interests of workers by ensuring that they are paid a basic minimum wage rate that is commensurate with their skills and the cost of living.