The term ‘minimum wages’ stands for the lowest amount of remuneration that an employer is required to pay wage earners for the work performed during a given period. Minimum wages are wages paid to skilled and unskilled labors to maintain a level of employment. The concept of minimum wages guarantees basic livelihood and preserves efficiency and a level of comfort for the worker.
The Minimum rates of wages payable by the Employer for the Scheduled Employments issued by the Central and respective State Governments in India. These minimum wage rates are issued under the Minimum Wages Act, 1948 wherein the rates are payable followed by the Employers, Managers or Contractors of any Establishment, Factory, Mine, Industrial Undertaking, etc. while making payments to their workers and employees.
The Central or the State government has issued the rates with revisions based on the classes of workers i.e. Skilled, Un-Skilled, Semi-skilled, Highly Skilled, etc.
Applicability and Scope of Minimum Wages Act:
This Act applies to the whole of India as laid down in Section 1 of the Act. It applies to any employment which employs 1000 employees in the State and to establishments under the authority of the Central Government, Railway Administration, Mines, Oil Fields, Major Ports, or any corporation established by the Central Government. It does not apply to any employees in any undertaking owned by the Central Government or the Federal Railway, except with the consent of the Central Government. This Act facilitates the following:
To provide the employee with necessities, proper health and comfort.
To ensure that the employee gets fair wages.
To fix the working hours of the employees.
HOW ARE MINIMUM WAGES CALCULATED IN INDIA?
Minimum Wages are calculated based on the following factors:
Areas within the State based on the development
Occupation and Skill level
Consumer Price Index (CPI)
The CPI is a measure to assess the changes over time in the general level of prices of goods and services that a reference population acquires, uses or pays for consumption. It is used as an essential economic tool by Central and State Governments, the Reserve Bank of India, for maintaining money supply and price stability.
A CPI is assessed as a progression of outline measures of the period-to-period corresponding change in the costs of a proper set of consumer goods and services of constant quantity and qualities, gained, utilized or paid for by the reference population. Every outline measure is developed as a weighted average of an enormous number of elementary total indices.
Each of the elementary total indices is assessed involving an example of costs for a characterized set of goods and services obtained, or by occupants of, a particular area from a given set of outlets or different sources of the utilization of goods and services.
Base Index or Wage Rate Index (WRI)
The WRI Number estimates the general changes in wage rates throughout a span of time, high or low WRI in an industry does not guarantee to demonstrate a high or low wage rate in that industry when collated with different Employments.
A base year is the first of a progression of years in an economic or financial index and is distinctively set to an arbitrary level of 100.
The Ministry of Labour and Employment released the Wage Rate Index based on Base Year, which is compiled and maintained by the Labour Bureau on the recommendations of the International Labour Organization and the National Statistical Commission.
Minimum Wages Act was enacted to safeguard the rights and interests of the workers working in some scheduled class of employment which is laid down under the Act. After the enactment of the Labour Codes, it will bring the gig workers and inter-state migrant workers into the ambit of social security. This will impact minimum wage considerations and will make it easier and more flexible in their hiring and firing decisions as well as shutting down operations in the country. The new labour codes aim to balance the welfare of employees and ease the burden of compliance for Employers in India.
Published Minimum Wage RatesAwaited Minimum Wage Rates