THE MINIMUM WAGES ACT 1948

MEMBERS

PALLAVI BHALERAO (03) KOMAL KADAM (07) SIDDHI GAWDE (16) SHRADDHA JANGAM (19) PRANITA THOMBRE (20)

BACKGROUND 1920: Mr. K.G.R. Choudhary recommended setting up boards for determining minimum wages for each

industry. 1928: International Labour Conference implemented system to fix wages for different trades. However,

the practice was not put into legislation in India. 1943: Standing Labour Committee, a Labour Investigation Committee was appointed on the

recommendation of Indian Labour Conference (ILC), 1943 to look into conditions of labour in terms of their wages, housing, social conditions, and employment.

1945: The first bill on minimum wages was drafted in ILC. 1946: A bill on minimum wages was introduced in Central Legislative assembly on the

recommendations of 8th Standing Labour Committee. The 8th meeting of the Standing Labour Committee, 1946 also recommended that a separate legislation that specified working hours, minimum wages and paid holidays of unorganized sector be enacted.

1947: Post-independence representatives of labour, employers, and government attended a government-organized conference. They defined minimum wages to be such that they should not only provide for subsistence but should also be enough for education, medical requirements and other amenities and should sustain efficiency.

1948: The Minimum Wages Act was eventually passed and was effective from 15 March. Under the act a tripartite committee "The Tripartite Committee of Fair Wage" was appointed that set definitions and guidelines for formulating a wage structure in India. The Committee of fair wage definition of minimum wage as: "The minimum wages must be provided not merely for the bare subsistence of life but also for the preservation of efficiency of the workers by providing for some measures of education, medical requirement and amenities". Recommendations of this committee have now set the foundations of wage fixation.

INTRODUCTION

[SEC 3]: THE ACT LAYS DOWN THE PRINCIPLE FOR FIXATION OFo A MINIMUM TIME RATE OF WAGESo A MINIMUM PIECE RATEo A GAURANTEED TIME RATEo AN OVERTIME RATE FOR DIFFERENT OCCUPATIONS, LOCALITIES OR CLASSES

OF WORK AND FOR ADULTS, ADOLESCENTS, CHILDREN, AND APPRENTICES.

[SEC 4]: THE MINIMUM WAGES MAY CONSIST OF o A BASIC RATE OF WAGES AND A COST OF LIVING OF ALLOWANCES o A BASIC RATE OF WAGES WITH OR WITHOUT THE COST OF LIVING

ALLOWANCE AND THE CAST VALUE OF THE CONCESSIONS IN RESPECT OF ESSENTIAL COMMODITIES SUPPLIED AT CONCESSIONAL RATES.

OBJECT OF THE ACT

TO PROVIDE MINIMUM WAGES TO THE WORKERS WORKING IN ORGANISED SECTOR.

TO STOP EXPLOITATION OF THE WORKERS.

TO EMPOWER THE GOVERNMENT TO TAKE STEPS FOR FIXING MINIMUM WAGES AND

TO REVISE THIS WAGES EVERY TWO YEARS.

TO APPLY THIS LAW ON MOSTOF THE SECTORS IN ORGANISED SECTOR (SCHEDULED

EMPLOYMENT

TO PROVIDE PROTECTION TO WORKERS IN EMPLOYMENTS IN WHICH THEY ARE

VULNERABLE TO WHERE SWEATED LABOUR IS MOST PREVALENT.

APPLICABILITY

THE ACT EXTENDS TO THE WHOLE OF INDIA. IN MAHARASHTRA, THE PROVISIONS OF THE ACT HAVE BEEN EXTENDED TO

ALL SHOPS AND COMMERCIAL ESTABLISHMENTS COVERED UNDER THE BOMBAY SHOPS AND ESTABLISHMENTS ACT, 1948.

THE CONTRACT LABOUR, FALLING WITHIN THE PURVIEW OF THE CONTRACT LABOUR ( REGULATION AND ABOLITION) ACT, 1970, HAS TO BE PAID MINIMUM WAGES UNDER THE MINIMUM WAGES ACT.

IN SHORT THOSE WHO ARE ELIGIBLE ARE,i. PERMANENT EMPLOYEESii. CONTRACT EMPLOYEESiii. CASUAL WORKERSiv. PEOPLE ON PROBATION GET FIXED PAY INSTEAD OF MINIMUM WAGES.v. TRAINEES GET STIPEND AND NOT MINIMUM WAGES.

DEFINITIONS

APPROPRIATE GOVERNMENT: IN THIS ACT, THE TERM ‘APPROPRIATE GOVERNMENT’ MEANS

CENTRAL GOVERNMENT- FOR ANY SCHEDULED EMPLOYMENT CARRIED ON UNDER THE AUTHORITY OF CENTRAL GOVERNMENT OR RAILWAY ADMINISTRATIONS AND FOR A MINE, OILFIELD OR MAJOR PORT OR ANY CORPORATION ESTABLISHED BY A CENTRAL ACT.

STATE GOVERNMENT- FOR ANY OTHER SCHEDULED EMPLOYMENT CARRIED ON WITHIN ITS TERRITORY.

WAGES: MEANS ALL REMUNERATION CAPABLE OF BEING EXPRESSED IN TERMS OF MONEY, WHICH WOULD BE PAYABE TO A PERSON EMPLOYED IN RESPECT OF HIS EMPLOYMENT OR OF WORK DONE IN SUCH EMPLOYMENT, AND INCLUDES HOUSE RENT ALLOWANCE.

EMPLOYER:i. THE TERM ‘EMPLOYER’ MEANS ANY PERSON EHO EMPLOYS ONE OR

MORE EMPLOYEES IN ANY SCHEDULED EMPLOYMENT IN RESPECT OF WHICH MINIMUM RATE WAGES HAVE BEEN FIXED UNDER THE ACT

ii. IT ALSO INCLUDES MANGER OF A FACTORY AS DEFINED UNDER THE FACTORIES ACT, 1948

iii. HEAD OF DEPARTMENT APPOINTED FOR THE SUPERVISION AND CONTROL OF EMPLOYEES IS CARRIED ON UNDER CENTRAL GOVERNMENT OR A LOCAL AUTHORITY.

iv. IN ANY OTHER CASE THE PERSON RESPONSIBLE FOR SUPERVISION, CONTROL OR PAYMENT OF WAGES.

EMPLOYEE:i. THE TERM ‘EMPLOYEE’ MEANS ANY PERSON WHO IS EMPLOYED TO

DO ANY WORK, SKILLED OR UNSKILLED, MANUAL OR CLERICAL, IN A SCHEDULED EMPLOYMENT.

ii. ALSO INCLUDES OUT-WORKERS TO WHOM MATERIALS ARE GIVEN FOR PROCESSING AT PREMISES

iii. DOES NOT INCLUDE ANY MEMBER OF THE ARMED FORCES OF THE UNION.

Fixation & Revision of Minimum Wages

Sec. 3 (1 – A) - The appropriate government may refrain

from fixing the minimum rates of wages fixed by it, in

respect of any scheduled employment in which these are,

in the whole state, less than one thousand employees

engaged in such employment.

Minimum Rates [Sec. 3 (2)] The appropriate government may fix :a) A min rate of wages for time work (referred to as ‘min time rate’) b) A min rate of wages for Piece work (referred to as ‘min piece rate’)c) A min rate of remuneration to apply in the case of such employees

employed on piece work for the purpose of securing to such employees a min rate of wages on a time work basis ( referred to as ‘guaranteed time rate’)

d) A min rate ( whether a time rate or a piece rate) to apply in substitution for the min rate which would otherwise be applicable, in respect of overtime work done by employers (referred to as ‘overtime rate’)

Different Minimum Rates (Sec 3(3))

In fixing or revising min rates of wages;a) Diff min rates of wages may be fixed for-

i. Diff scheduled employment;ii. Diff classes of work in the same scheduled employment; iii. Adults, adolescents, children and apprentices;iv. Diff Localities

b) Min rates of wages may be fixed for any one or more of the following wage periods namely-

v. By the hour vi. By the day vii. By the month viii. By such other larger wage periods as may be prescribed

Minimum rates of wages (sec.4) 1. Basic + Special Allowance (Which varies with the cost of living index). 2. Basic + Cash value of concessional supply of materials like food, clothes,

etc. 3. An all inclusive rate which includes Basic + Cost of living Allowance +

Cash value of concessional supply of materials.

Procedure for fixation and revision of minimum rates of wages (sec.5)1. Publish its proposals in the official gazette asking comments from the

affected parties. 2. Constitute committees/sub committees for the purpose. 3. The committees/sub-committees and advisory boards constituted by the

Government consist of equal number of members of : Employers Employees, and Independent persons

Wages in kind (sec.11)…

• Minimum wages under this Act must be paid in cash. but this section authorized the payment of minimum wages in kind.

• Custom to pay wages wholly or partly in kind.• Authorization must be made by notification in the Official Gazette.• Provision of essential commodities at concessional rates.

Payment of Minimum Rates of Wages (sec 12)…

• This section provides that where minimum wages have been in force in any scheduled employment, the employer shall pay wages to every employee engaged in such employment at a rate not less than the minimum rate of wages fixed under (sec. 5).

• The wages shall be paid to him without deduction of any kind.

Wages for overtime (sec14)When workers works for more then nine hrs. or for 48 hrs. in any week .

Wages for less than the normal working day (sec15)Where his failure of work is caused by his unwillingness to work & not by omission of the employer .

Wages for two or more classes of work (sec16)Where to each employee a different minimum rate of wages is applicable

Minimum time rate wages for piece work (sec17)Employer shall pay to such an employee wages at not less than the minimum time rate .

Maintenance of registers & records (sec18)• Registers shall give particulars of employees by him.• Work performed by them .• Overtime work• Gross wages ,deductions made etc.

RECORDS TO BE MAINTAINED- SEC. 18

• Employer should maintain a Register of Employees containing the details such as the name, address, father’s name, age, sex, the work performed, the wages paid to them.

• Every Employer should display the above particulars in the premises where the Employee works.

• The other Registers to be maintained are: i. Register of Fines. ii. Register of Deductions for Damage / Loss caused to the employer, by

the neglect / default of the employed persons. iii. Overtime Register for Workers iv. Muster-Roll

• The Registers shall be preserved for a period of 3 years after the date of last entry made

Every employer is required to:

i. Put up a notice containing the minimum rates of wages fixed & keep it clean & legible condition.

ii. Exhibit an extract of the Act, the Rules made there under with the name and address of the inspector shall be displayed in English and in a language understood by the majority of the workers.

iii. Give annual returns in to the labour commissioner, and Exhibit a notice in the public motor vehicles in case of employment in public motor transport

ENFORCEMENT SEC.19

• The Appropriate Government appoint inspectors to enforce Act. • All the officers of labour dept. notified. • The inspectors have right

i. to enter the premises of employers at all reasonable hours. ii. to verify all the records as required to be maintained by law. iii. to examine any persons they find in the premises.iv. to enquire about the work given to workers and. v. to get information from the employers about the payment of wages,

etc., vi. to cease or take copies of registers.

• The Inspector shall be deemed to be a Public Servant.

AUTHORITIES UNDER THE ACT

Commissioner for workmen’s compensation

Exercising functions as a Labour Commissioner

Rank of Labour Commissioner

Experience & Stipendiary magistrate

Malicious or Vexatious Application

If the Authority hearing an application is satisfied that it was malicious or vexatious, it may direct that a penalty not exceeding Rs. 50 be paid to the employer by the person presenting the application.

ENFORCEMENT

Appropriate authority

Chief Labour Commissioner

Enforcement Act

Purposes Act

OFFENCES BY COMPANIES.

If the person committing any offence under this Act is a company, every person who at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company as well as the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly: Cognizance of offences.- No Court shall take cognizance of a complaint against any person for an offence-- (a) under clause (a) of section 22 unless an application in respect of the facts constituting such offence has been presented under section 20 and has been granted wholly or in part, and the appropriate Government or an officer

Offence Punishment

Payments of less than minimum wages of employee

Imprisonment which may extend up to 5 Years or fine which may extend up to Rs 10,000/- or both

PENALTIES:i. pays to any employee less than the minimum rates of

wages fixed for that employee's class of work, or less than the amount due to him under the provisions of this Act, or

ii. (b) contravenes any rule or order made under (Sec.22),

EMPLOYERS' OBLIGATIONS

i. As an employer you are responsible for worker's compensation insurance cover to protect your employees. This insurance is compulsory. You might also have to extend to cover to include sub-contractors working for you.

ii. The employer may make a deduction out of wages as may be authorized. iii. The employer shall not make deduction from wages except those

authorized by or under the rules.iv. The employer shall pay over time at double ordinary rate of wages.v. Every employer shall issue wage slips in form of describe containing.vi. The employer authenticate the entries in the wage book or wage slip. vii. The employer shall allow a rest day with wages to the employees every

week which ordinarily should be Sunday or any other day

LET US SUM UP The minimum wages act aims to extend the concept of social

justice to the employees employed in certain scheduled employments including agriculture.

The act ensures protection to workers in employments in which they are vulnerable to exploitation on account of lack of organization and bargaining power and where sweated labour is most prevalent.

The act provides for statutory fixation and revision of minimum rates of wages by the central or state governments within a specified period.

While fixing or revising minimum wages, the appropriate government may follow either the committee method or notification method.

The employer is bound to pay minimum rates of wages fixed by the government to every employee covered under the scheduled employment.

CONTD….

The appropriate government may appoint an authority for a specified area to hear and decide claims arising out of payment of wages at less than the minimum rates of wages and other incidental matters.

The act is administered both by the central and state government.