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8/18/2019 Penal provision and other deterrence under minimum wages act
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LABOUR LAW- II
Penalties and other
deterrence underMinimum Wages Act,194
Submitted to- Ms. Manleen Kaur
Submitted by - Sahil Ahmed VIth Semester
Section B Faculty of Law
Jamia Millia Islamia
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ACKNOWLEDGEMENTFirstly, I would like to express my profound sense of gratitude towards the
almighty “ALLAH” for providing me with the authentic circumstances which
were mandatory for the completion of my project.
Secondly, I am highly indebted to my teacher Ms. Manleen Kaur at Faculty of
Law, amia !illia Islamia, "ew #elhi for providing me with constant
encouragement and guidance throughout the preparation of this project.
$hirdly, I thank the Law library staff who liaised with us in searching material
relating to the project.
!y cardinal thanks are also for my parents, friends and all teachers of law
department in our college who have always been the source of my inspiration and
motivation without which I would have never been able to unabridged my project.
%ithout the contribution of the above said people I could have never completed
this project.
Sahil &hmed
'.&.LL.' ()ons*
+Ith Semester
rd -ear
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Table of Contents
)istorical 'ackground..................................................................................
Introduction/ !inimum %ages&ct 012.......................................................3
4riteria for notification of Scheduled 5mployments......................................6
7enal provisions 8 other deterrence under !inimum %ages &ct...................2
Section 9: 4laims........................................................................................2
Section 99 7enalties for certain offences........................................................2
Section 99& ;eneral provision for punishment of other offences....................1
Section 99' 4ogni to scheduled
employments.................................................................................................09
Section 9 5xemption of employer from liability in certain cases.....................0
Section 93 4ontracting out.............................................................................0
Indian perspective/ 7enal provision under Labour Laws...................................0
0.* &pprentices &ct, 01>0...............................................................................0
9.* 4ontract labour (?egulation 8 &bolition* &ct, 016:...................................0
.* Factories &ct, 012....................................................................................03
.* Industrial #isputes &ct, 016.....................................................................03
3.* Industrial 5mployment (standing orders* &ct, 01> 8 the ?ule...................0>
4onclusion.....................................................................................................06
'ibliography...................................................................................................02
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#istorical Bac$ground
@ $he initiative started with the resolution placed by one Shri. A. ;. ?. 4houdhary in 019: for setting up 'oards for determination of minimum wages in each industry.
@ $he International Labour 4onference adopted in 0192 4onvention "o.9> and ?ecommendation "o. : relating to wage fixing machinery in trades or parts of trades.
@ =n the recommendation of the Standing Labour 4ommittee and Indian Labour 4onference, aLabour Investigation 4ommittee was appointed in 01 to investigate into the Buestion of wages
and other matters like housing, social conditions and employment.
@ & draft bill was considered by the Indian Labour 4onference in 013.
@ $he 2th meeting of the Standing Labour 4ommittee recommended in 01> to enact a separate
legislation for the unorgani
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I!"#$%&!I"' Minimum (a)es Act *+,
$he !inimum %ages &ct, 012 in India is a welfare &ct applicable to the workers in the
unorganised sector who lack the collective bargaining and are likely to be exploited. &part fromthe !inimum %ages &ct, 012, the other relevant &cts that have a bearing in influencing thewage level as well as the structure of wages for the unorgani61 employments at the State level (&nnexureEI*.&ll the list of industries mentioned in the schedule of the &ct may not be applicable to all the
States. $he States may notify minimum wages only if there are more than 0::: workers working
in the State in a particular employment. $he &ct mandates revision of the wages by respective;overnments at an interval of every five years. $he minimum wage fixed has two components
the basic wage and the variable dearness allowance which is adjusted to the 4onsumer 7rice
Index every two years. $he &ct also provides for overtime allowance wherein a worker whoworks more than the stipulated hours of work is entitled to overtime wages fixed according to the
rules framed by the State ;overnment.
In India, there is no uniform nationally applicable minimum wage. $he minimum wage is sectorD
occupation driven and varies across States for the same occupationDindustry. $he !inimum
1 Minimum Wages in India& Issues and 'oncerns () Pro*+ Biuar$$e) and .hushi
Mehta
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%ages &ct 012 does not define minimum wages nor does it lay down the criteria for fixing
minimum wages. $he criteria arrived at in the 0136 Indian Labour 4onference forms the basis.
$he !inimum %ages &ct also entrusts the appropriate government to lay down the hours of
work for the scheduled employments as under/ (a* fix the number of hours of work which shall
constitute a normal working day, inclusive of one or more specified intervals and (b* provide for a day of rest in every period of seven days which shall be allowed to all employees or to any
specified class of employees and for the payment of remuneration in respect of such days of rest
and provide for payment for on a day of rest at a rate not less than the overtime rate. 5venremuneration for piece rate work is fixed in !inimum %ages &ct.
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Criteria for notifi&ation of se$ule$ e0loy0ent
Cnder the provisions of the !inimum %ages &ct, 012, both 4entral and State ;overnments are
appropriate ;overnments to fix, review and revise the minimum wages of the workers employed
in the scheduled employments under their respective jurisdictions. $he appropriate ;overnments
have also been empowered to notify any employment in the schedule where the number of employees is 0::: or more and fix the rates of minimum wages in respect of the employees
employed therein. $here are 3 scheduled employments in the 4entral Sphere while in the StateSphere the number of such employments is as many as 031>.
$he !inimum %ages &ct does not provide for any discrimination between male and female
workers or different minimum wages for them. &ll the provisions of the &ct eBually apply to both male and female workers.
"orms for fixationDrevision of minimum wages
$he norms include those which were recommended by the Indian Labour 4onference in itssession held in 0136.
(a* consumption units for one earner.
(b* !inimum food reBuirements of 96:: calories per average Indian adult.
(c* 4lothing reBuirements of 69 yards per annum per family.
(d* ?ent corresponding to the minimum area provided for under ;overnmentGs Industrial
)ousing Scheme.
(e* Fuel, lighting and other miscellaneous items of expenditure to constitute 9:H of the total
!inimum %ages.
=ther parameters
(i* 4hildren education, medical reBuirement, minimum recreation including
festivalsDceremonies and provision for old age, marriage etc. should further constitute 93H of thetotal minimum wage. $his judgment was delivered by the Supreme 4ourt in the case of
Workmen Represented By Secretary ". Management Of Reptakos Brett 2.
(ii* Local conditions and other factors influencing the wage rate.
! 199! AIR %4, 1991 2'R 2u3l+ !5 1!9
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Penal 3ro6isions and otherdeterrence under the Minimum
Wages Act1enalties Offen&e 1unis#0ent
7e&tion *6
7or 3a)ing less than
minimum rates o* 8ages
Im3risonment u3to /
months or 8ith ne u3to
Rs+%:-7or contra6ention o* an)
3ro6isions 3ertaining to
;ing hours *or normal
8or$ing da) etc+
Im3risonment u3to /
months or 8ith ne u3to
Rs+%:-
7e&tion **. 1enalties for &ertain offen&es. EE Any employer who-- a! pays to any employee less
than the minimum rates of wages fi"ed for that employee#s class of work, or less than the amount due to him under the provisions of this Act, or b! contravenes any rule or order made under
section $%, shall be punishable with imprisonment for a term which may e"tend to si" months, or
with fine which may e"tend to five hundred rupees, or with both&
Provided that in imposing any fine for an offence under this section, the 'ourt shall take intoconsideration the amount of any compensation already awarded against the accused in any
proceedings taken under section ().
Section 99 lays down that an employer shall be punishable with imprisonment for a term which
may extend to six months or with the fine which may extend to five hundred rupees or with both,
if he EE0. pays to any employee less than the minimum rates of wages fixed for that employeesG
class of work, or less than the amount due to them under the provisions of this &ct or
9. contravenes any rule or order made under Section 0.$he 4ourt, while imposing any fine for an offence under this section, shall take into
consideration the amount of any compensation already awarded against the accused in any
proceedings taken under Section 9:.
Bijay Cotton Mills Ltd ". State of Ajmer
3
, the &pex court held that it is a criminal offence not to pay the minimum wages fixed under the provisions of the &ct.
" 19%%5 I LL
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7e&tion **8A General 1ro"isions for unis#0ent of ot#er offen&es.E
Any employer who contravenes any provision of this Act or of any rule or order made thereunder
shall, if no other penalty is provided for such contravention by this Act, be punishable with fine
which may e"tend to five hundred rupees.E9lanation/ &ccording to Section 99E& any employer who contravenes any provision of this
&ct or of any rule or order made thereunder shall, if no other penalty is provided for such
contravention by this &ct, be punishable with fine which may extend to five hundred rupees.
%hen the Buestion relates to nonEpayment of wages for work done on Sundays which is referred
to Industrial $ribunal, the $ribunal cannot allow any additional payment as penalty under this
section.In Campak Lal !akkar "# State of $%jarat &, !orvi +egetable 7roducts Ltd. and its !anaging
#irector and Secretary were prosecuted under Section 99E& of the !inimum %ages &ct for their
failure to maintain certain documents which were reBuired to maintained under Section 02 of the
&ct. $he prosecution was possible only when the &ct applied to a mill manufacturing +anaspati.
5mployment in any oil mill is covered by item 3 of 7art I of the Schedule of the &ct. $herefore,
the &ct could apply to the company only when a mill manufacturing +anaspati was covered
under the head oil mill. It was held that the word GoilG is not defined in the &ct and, therefore,
its dictionary meaning may be applied. In view the meaning of the word GoilG as given in
%ebsterGs #ictionary G+anaspatiG is essentially an oil although it is a different kind of oil than that
oil which forms its basic ingredient. =il will remain oil if it retains its essential properties and
merely because it has been subjected to certain processes would not convert into different
substance. $herefore, prosecution of the petitioner under Section 99E& was possible.
**8:. Cogni;an&e of offen&es
4 19 AIR 19, 191 2'R 15 44
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$! *o court shall take cogni+ance of a complaint against any person for an offence
a! under clause a! of section (( unless an application in respect of the facts constituting
such offence has been presented under section () and has been granted wholly or in part,and the appropriate government or an officer authori+ed by it in this behalf has
sanctioned the making of the complaint
b! under clause b! of section (( or under section ((A e"cept on a complaint made by or
with the sanction of an nspector.
(! *o court shall take cogni+ance of an offence
a! under clause a! or clause b! of section (( unless complaint thereof is made within
one month of the grant of sanction under this section
b! under section ((A unless complaint thereof is made within si" months of the date on
which the offence is alleged to have been committed.
E9lanation< &ccording to Section 99E'(0*(a* no court shall take the cogni
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(! *otwithstanding anything contained in sub-section $! where any offence under this Act has
been committed by a company and it is proved that the offence has been committed with the
consent or connivance of or is attributable to any neglect on the part of any director manager secretary or other officer of the company such director manager secretary or other officer of the
company shall also be deemed to be guilty of that offence and shall be liable to be proceeded
against and punished accordingly.
E9lanation< Section 99E4(9* starts with nonEobstante clause (which means that the provisionunder nonEobstante clause would prevail over the other clause*3, which says if it is proved that
(i* offence has been committed with the consent or connivance of, or
(ii* is attributable to any neglect on the part of any #irector, !anager, Secretary or other =fficer
of the 4ompany, such that offence and shall be liable to proceeded against and punishedaccordingly
/or the purposes of this section
a! 0 company0 means any body corporate and includes a firm or other association of individuals
and
b! 0 director 0 in relation to a firm means a partner in the firm.
It was held in (aricaran Sing )%gal and oters v. State of Biar * that Section 99E4 of the!inimum %ages &ct, 012, is in pari materia with 7e&tion (6 of t#e Essential Co00o$itiesA&t ()>>-, and therefore, #irectors of a company can be prosecuted along with the 4ompany
% Parasuramaiah 6. Lakshamma AIR 19/% AP !!
/ 1995 I LL< "1 Patna5 the La(our Ins3ector had ins3ected the com3an) o* the
3etitioner $no8n as M:s U+2+ =ugal and 'om3an) and *ound that certain registers
8ere not maintained in accordance 8ith the re>uirements o* the Minimum Wages
Act and the Rules *ramed thereunder+ Petitioners su(mitted that the 3etitioners are
sho8n as the directors o* M:s U+2+ =ugal and 'om3an) and there is no s3ecic
allegation that the) 8ere res3onsi(le *or the conduct o* the (usiness+
0 Section * in !he /ssential &ommodities Act0 *+111+ O?ences () com3anies+@15 I* the 3erson contra6ening an order made under section " is a com3an), e6er) 3erson
8ho, at the time the contra6ention 8as committed, 8as in charge o*, and 8as res3onsi(leto, the com3an) *or the conduct o* the (usiness o* the com3an) as 8ell as the com3an),shall (e deemed to (e guilt) o* the contra6ention and shall (e lia(le to (e 3roceeded againstand 3unished accordingl)& Pro6ided that nothing contained in this su(-section shall renderan) such 3erson lia(le to an) 3unishment i* he 3ro6es that the contra6ention too$ 3lace8ithout his $no8ledge or that he e;ercised all due diligence to 3re6ent such contra6ention+!5 ot8ithstanding an)thing contained in su(-section 15, 8here an o?ence under this Acthas (een committed () a com3an) and it is 3ro6ed that the o?ence has (een committed8ith the consent or conni6ance o*, or is attri(uta(le to an) neglect on the 3art o* an)
https://indiankanoon.org/doc/142278/https://indiankanoon.org/doc/142278/https://indiankanoon.org/doc/426357/https://indiankanoon.org/doc/411484/https://indiankanoon.org/doc/426357/https://indiankanoon.org/doc/411484/https://indiankanoon.org/doc/142278/https://indiankanoon.org/doc/142278/
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under the !inimum %ages &ct and the rules, if a violation is committed. It is necessary to keep
in point the specific part played by each of them or their individual responsibility in the
complaint.
**D. 1ay0ent of un$isburse$ a0ounts $ue to e0loyees
All amounts payable by an employer to an employee as the amount of minimum wages of the
employee under this Act or otherwise due to the employee under this Act or any rule or order
made thereunder shall if such amounts could not or cannot be paid to the employee on account of the prescribed authority who shall deal with the money so deposited in such manner as may
be prescribed.
E9lanation< &ccording to Section 99E# all the amount(minimum wage* payable by the
employer to an employee shall be deposited with prescribed authority, if the same could not be or cannot be paid to the employee on account of his death or an account of his whereabouts not
being known. $he prescribed authority shall deal with the deposited amount in such a manner as
may be prescribed.
**8?. Ali&ation of 1ay0ent of Wages A&t ()2+ to se$ule$ e0loy0ents
($! *otwithstanding anything contained in the Payment of 1ages Act $2%3 4 of $2%3! theappropriate government may by notification in the 5fficial 6a+ette direct that sub7ect to the
provisions of sub-section (! all or any of the provisions of the said Act shall with such
modifications if any as may be specified in the notification apply to wages payable to employeesin such scheduled employments as may be specified in the notification.
(! 1here all or any of the provisions of the said Act are applied to wages payable to employees
in any scheduled employment under sub-section $! the nspector appointed under this Act shall be deemed to be the nspector for the purpose of enforcement of the provisions so applied withinthe local limits of his 7urisdiction.
Basic Siksa 'arisad And Oters ". '#A# And Oters+ &llahabad )igh 4ourt held that, on a
careful reading of the Section 99EF of the !inimum %ages &ct 012 it reveals thatnotwithstanding anything contained in the payment of wages &ct, 01>, the appropriate
;overnment may by notification apply all or any of the provisions of said &ct in respect of
director, manager, secretar) or other ocer o* the com3an), such director, manager,secretar) or other ocer shall also (e deemed to (e guilt) o* that o?ence and shall (e lia(leto (e 3roceeded against and 3unished accordingl)+ C;3lanation+@7or the 3ur3oses o* this
section,@a5 Dcom3an)EE means an) (od) cor3orate, and includes a rm or other association o*indi6idualsF and(5 DdirectorEE in relation to a rm means a 3artner in the rm+
G!/HR=-A# 0
https://indiankanoon.org/doc/1793157/https://indiankanoon.org/doc/1932940/https://indiankanoon.org/doc/1793157/https://indiankanoon.org/doc/1932940/
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wages payable to the employees in such scheduled employment as may be specified in such
notification. In other words, it means that irrespective of nonEapplication of provisions of the &ct
01> on its own strength in respect of certain class of employees, the provisions of the &ctE01>can be made applicable by notification of appropriate ;ovt. in respect of payment of wages of
such employees if their employment is under scheduled employment of &ctE012.
*2. E9e0tion of e0loyer fro0 liability in &ertain &ases
%here an employer is charged with an offence against this &ct he shall be entitled uponcomplaint duly made by him to have any other person whom he charges as the actual offender
brought before the court at the time appointed for hearing the charge and if after the commission
of the offence has been proved the employer proves to the satisfaction of the courtE
(a* that he has used due diligence to enforce the execution of this &ct and
(b* that the said other person committed the offence in Buestion without his knowledge
consent or connivance.
that other person shall be convicted of the offence and shall be liable to the like
punishment as if he were the employer and the employer shall be discharged /
1ro"i$e$ that in seeking to prove as aforesaid the employer may be examined on oathand the evidence of the employer or his witness if any shall be subject to crossE
examination by or on behalf of the person whom the employer charges as the actual
offender and by the prosecution.
*>. Contra&ting out
Any contract or agreement whether made before or after the commencement of this Act whereby
an employee either relinquishes or reduces his right to a minimum rate of wages or any privilege
or concession accruing to him under this Act shall be null and void in so far as it purports toreduce the minimum rate of wages fi"ed under this Act.
E9lanation< Section 93 is a provision of absolute prohibition against contracting out of the
benefit and privileges under !inimum %ages &ct. 5ven if the employee relinBuishes or reduces
his right to minimum rate of wages or any privileges or concessions accruing to him under the
&ct, it shall be null and void in so far as it purports to reduce the minimum rates of wages fixedunder the &ct.
Somien Mat%rai -asa"a ". Lalji (akk% 'armar Leater Works. ;ujarat )igh 4ourt held
that any agreement reducing the minimum rates of wages is null and void as it violates Section93 of the !inimum %ages &ct, 012.
9 1945 IILL< "1 u
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!n$ian 1erse&ti"e< 1enal 1ro"ision un$er Labour La=s
!e Apprentices Act, /.*/ Ob@e&ti"e months or with fine when 5mployer
(i*. engages an apprentice a person who is not Bualified for being so engaged, or
(ii*. fails to carry out the terms 8 conditions of a contract of apprenticeship, or
(iii*. contravenes the provision of the &ct relating to the number of apprentices which he is
reBuired to engage under those provisions.
Contract Lao%r 0Reg%lation 1 Aolition Act, /.4Ob@e&ti"e
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1%
7e&tion ** Obstru&tion
7or o(structing the
ins3ector or *ailing to
3roduce registers etc+ - "
monthsE im3risonment or
ne u3to Rs+%, or (oth+
7e&tion *2 iolation
7or 6iolation o* the
3ro6isions o* Act or the
Rules, im3risonment o* "
Months or ne u3to
Rs+1+ On continuing
contra6ention, additional
ne u3to Rs+1 3er da)
5actories Act,/.&+
Ob@e&ti"euent contra6ention o* some
3ro6isions+
J Im3risonment u3to " )ears or ne
not less than Rs+1, 8hich ma)
e;tend to Rs+!,,+
J O(structing Ins3ectors+ J Im3risonment u3to / months or ne
u3to Rs+1, or (oth+
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J Wrong*ul disclosing result 3ertaining
to results o* anal)sis+
J Im3risonment u3to / months or ne
u3to Rs+1, or (oth+
J 7or contra6ention o* the 3ro6isions o*
2ec+41B, 41' and 41# 3ertaining tocom3ulsor) disclosure o* in*ormation
() occu3ier, s3ecic res3onsi(ilit) o*
occu3ier or right o* 8or$ers to 8or$
imminent danger+
J Im3risonment u3to 0 )ears 8ith ne
u3to Rs+!,, and on continuationne K Rs+%, 3er da)+J Im3risonment o* 1 )ears 8hen
contra6ention continues *or one )ear+
• 6nd%strial )isp%tes Act, /.& Ob@e&ti"e
months or with fine upto
?s.,:::
Section 92 'reach settlement for award Im3risonment *or /months or 8ith ne u3to
Rs+1,
Section : 4losure without >: daysJ
notice under Sec.93 FF&
u3toRs+! 3er da)
6nd%strial 7mployment 0standing orders Act, /.&* 1 te
R%le
Ob@e&ti"e
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K Failure of employer to submit draft Standing =rders fine of ?s.3::: and ?s.9:: for every day
on continuation of offence.
K Fine of ?s.0:: on contravention and on continuation of offence ?s.93 for every day.
CONCL%7!ON
%hy many employers are not so serious in implementing the minimum rates of
wages is due to the reason that the penal provisions under the &ct have no
deterrent effect. $he maximum penal punishment for paying less than the
minimum rates of wages fixed for the employees is imprisonment for a term
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which may extend to six months or with fine which may extend to five hundred
rupees, or with both. In cases where any employer contravenes any provision of
the &ct or of any rule or order made thereunder shall be punishable with fine,
which may extend to five hundred rupees. $he information regarding the
prosecutions under the &ct, clearly establishes that in all the cases of violation
only the fines were imposed on the erring employers. 'y violating the
compliance of minimum wage notifications, the employers might be saving
huge amount of money and they may not be so serious in paying a meager
amount by way of fines under the &ct. $he solution to this problem, penal
provisions pertaining to the violations under the &ct, must be deterrent without
any option of payment of fine.
Lack of awareness0: about the minimum wages act among employers and
workers is also an issue which has been highlighted in the 5valuation Studies
on Implementation of the !inimum %ages &ct, 012 conducted by the Labour
'ureau under the !inistry of Labour 8 5mployment 00. =n the other handdespite being aware about the minimum wages the willingness of workers to
accept lower wages is influenced by other compelling factors such as weak
bargaining power, the rural push induced by conditions of drought, nonE
availability of work, loss of income yielding assets, indebtedness etc. the
;overnment should undertake the schemes providing minimum educational
programmes in order to bring an awareness of the important rights and
privileges of the exploited labour under various labour laws.
If the above suggestions are incorporated into the labour jurisprudence,
it is believed that the constitutional objective of securing socioEeconomic justice
will be fulfilled.
:ibliogra#y
1 In the C6aluation 2tud) on the Im3lementation o* Minimum Wages Act, 194 in
2tone Brea$ing 2tone 'rushing Industr) in .arnata$a !0- among the units
sur6e)ed onl) " 3er cent o* the units and 3er cent 8or$ers re3orted a8areness
a(out the Act+
11 Re3ort on the Wor$ing o* the Minimum Wages Act, 194 *or the )ear !1!
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• !inimum %ages and the %orking 7oor/ ;lobal %age ?eport 9:09D0.
• ames Sherk (9:0*/ %hat is !inimum %age/ Its )istory and 5ffects on the
5conomy, $estimony before )ealth, 5ducation, Labor and 7ensions
4ommittee, Cnited States Senate on une 93, 9:0.
•7atrick 'elser and Cma ?ani (9:0:*/ 5xtending the 4overage of minimumwages in India/ Simulations from household dataJ 4onditions of %ork and
5mployment Series "o.9>, International Labour =ffice ;eneva.
• 7rof. 'iju+arkkey and Ahushi !ehta/ !inimum %ages in India/ Issues and
4oncernsJ.
• %orld of %ork ?eport (9:0*/ ?epairing the economic and social fabric.
• Implementation of the !inimum %ages &ct, 012 E 4ase Study of India 'y
!s. &. Srija.