2. History of the Act
The concept of ‘Minimum Wages’ was first
developed by International Labor Organisation
(ILO) in 1928 for industries where the level of
wages was substantially low.
ILO policies regulates various labor and
employment issues like conditions of work,
social security, industrial relations, safety and
health, equal opportunity, non-discrimination
and human rights.
3. Shri K.G.R. Choudhary in 1920 took initiative to set
up boards for determination of wages.
The International Labour Conference adopted
convention No.26 and 30 in 1928 relating to fixation
of wage.
A Minimum Wages Bill was introduced in the Central
Legislative Assembly on 11.04.1946 and came into
force with effect from 15.03.1948.
4. Objectives of the Act
To provide minimum wages to the workers working
in organized sector.
To stop exploitation of the workers.
To empower the government to take steps for fixing
minimum wages and to revise it in a timely manner.
The Act aims not only to ensure the mere physical
need of the worker but also to increase his
capabilities as a workman.
5. Salient Features of the Act
The Act provides for the fixation of:
Minimum time rate of wages;
Minimum piece rate;
Guaranteed time rate; and
Overtime rate for different occupations,
localities or classes of work for adults,
adolescents, children and apprentices.
6. The minimum rate of wages under the Act may
consist of:
a basic rate of wages and a cost of living allowance;
or
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 rate; or
an all inclusive rate.
7. The Act requires that wages shall be paid in cash,
although it empowers the Appropriate Government to
authorize the payment of minimum wages, either
wholly or partly in kind in particular cases.
It lays down that the cost of living allowance and the
cash value of concessions in respect of supplies of
essential commodities at concessional rate shall be
computed by the competent authorities.
8. The Act empowers the Appropriate Government to fix
the number of hours of work per day, to provide for a
weekly holiday and the payment of overtime wage.
Sections 3 to 9 and 27 provide provisions for fixing
and revising minimum rate of wages.
The establishments covered by the Act are required to
maintain registers and records in the prescribed
manner.
It provides penalties for certain offences.
9. Definitions
(a) ‘Adult', ‘Adolescent’ and ‘Child’ Adult- is who
has completed his eighteen years of age.
Adolescent – completed his fifteen years but not
eighteen years of age.
Child –who has not completed his fifteen years of
age
(b) Appropriate government India has federal
form of Government at the centre and state
level . The minimum wages act provide separate
areas of jurisdiction for both centre and state
10. Employer means any person who employs one
or more employees in any schedule of
employment.
(h) Wages means all remuneration capable of
being expressed in terms of money.
(i) Employee means any person employed for
hire or reward and includes an out –worker.
11. Types of Wages
Sec 3(2) of the Minimum Wages Act, 1948 defines various kinds
of wages
Time work wages: Wages may be fixed
(a) by the hour;
(b) by the day
(c) by the month;
(d) by such other longer wage period as may be prescribed.
Piece-work Wages: Is fixed for a specific piece of work.
Guaranteed time-rate wages: They are payable to an employee
employed on piece-work to secure wages on a time work basis.
12. Over time wages: The appropriate Government may fix
the number of hours constituting a normal working day.
Sec 14(1) of the Act, the employer shall pay to an
employee wages at the overtime if he works in excess of
the number of hours constituting a normal working.
Other kind of wages: basing on the day manner of
payment there are two types of wages namely wages in
cash and wages in kind.
Based on amount they are classified into (i) living wage
(ii) Fair wage and (iii) minimum wages.
13. Fixing Of Minimum Rates Of Wages (Sec.3)
The minimum rates of wages will be reviewed/
revised, for every five years, by the appropriate
govt.
Appropriate govt. can add any employment, to
the schedule(part-I or part – II), wherein one
thousand or more employees are found
working
14. 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.
15. Procedure for Fixing and Revising Minimum Wages
According to Section 5 of the Act, in fixing
or revising minimum rate of wages in
respect of any scheduled employment for
the first time, the Appropriate Government
can follow the two methods viz,:
Committee Method.
Notification Method.
16. Committee Method
The Appropriate Government may appoint as many
committees and sub-committees as it considers
necessary to hold enquiries and advise it in respect
of such fixation or revision as the case may be.
After considering the advice the committee or
committees, the Appropriate Government, by
notification in the Official Gazette fix or revise the
minimum rate of wages.
17. Publish its proposals in the official gazette
asking comments from the affected
parties.
The committees/sub-committees and
advisory boards constituted by the
Government consist of equal number of
members of : • Employers • Employees,
and • Independent persons
18. Constitution of Boards
Advisory Boards
Section 7 of the Act, empowers the Appropriate
Government to appoint an Advisory Board for the purpose
of:
Co-ordinating the work of committees and sub-
committees appointed under Section 5; and
Advising the Appropriate Government in the matter of
fixing and revising minimum rates of wages.
19. Central Advisory Board
As per Section 8 of the Act, the Central
Government has the responsibility to constitute
a Central Advisory Board for the purpose of:
Advising the Central and State Governments in
the matters of fixation and revision of
minimum rates of wages and other matters
under this Act; and
For co-ordinating the work of the Advisory
Boards.
20. The Board would consist of:
Persons to be nominated by the Central Government
representing employers and employees in the scheduled
employments in equal numbers; and
Independent persons not exceeding one-third of its total
number of members; one of such independent persons
shall be appointed as the Chairman of the Board by the
Central Government.
21. Wages in kind (sec. 11)
• Minimum wages shall be paid in cash.
• The appropriate govt. may authorize,
where there has been a custom of
payment in this manner, payment of
minimum wages either wholly or partly in
kind.
• The appropriate govt. may authorize
supply of essential commodities at
22. Payment of minimum rate of wages (sec. 12)
The Minimum Wages has to be paid
without any deductions other than
Statutory Deductions.
Payment of wages less than minimum
wages on the ground of less performance
or output is illegal.
23. Fixing Hours of Work (sec. 13)
For an Adult worker, number of Working hours
should not exceed 48 Hours in a week with a
weekly Holiday.
The Daily Hours should not exceed more than
9 Hours with 1 Hour Rest Interval.
Provision of Compensatory Holiday/Overtime
Wages if working on holiday.
24. Overtime wages (sec. 14)
If the person has worked for more than 48
hours in a week then, the excess hours worked
will be treated as Overtime.
Overtime wage rate will be twice of the
normal wage rate .
25. Wages for a person who has worked
less than normal working hours
Employer could not provide the activities
of the job then, the employee is entitled to
receive full salary.
Employee has not worked due to his
unwillingness then, the employee is not
entitled t to receive full salary.
26. Records to be Maintained (sec. 18)
The Registers should contain the following
particulars-
(i) particulars of employed persons
(ii) the work performed by them
(iii) the wages paid to them
(iv) the receipts given by them
27. Sec 19- Powers of Inspectors
Entering in the premises in any scheduled
employment
Examining of any register, record of wages or notices
required to be kept or exhibited for inspection;
Examine employee;
Seize or take copies of register, record or wages or
notices or portions as he may consider relevant in
respect of an offence under the Act which he has
reason to believe has been committed by an employer;
and
28. Sec 20- Claims
Persons Appointed as Authority
Any Commissioner for Workmen’s Compensation;
Any officer of Central Government exercising
functions as a Labor Commissioner for any region;
or
Any officer of the State Government not below the
rank of a Labor Commissioner; or
Any other officer with experience as a Judge of a
Civil Court or as Stipendiary Magistrate.
29. any claim arising out of payment of less than the
minimum rates of wages; or
any claim in respect of the payment of
remuneration for days of rest; or
any claim in respect of payment of remuneration
for work done on such days under clause (b) or
(c) of Section 13(1); or
any claim of wages at the overtime rate under
Section 14, or claims of employees employed or
paid in that area.
30. Persons Eligible for Raising Claim
20(2)
the employee himself; or
any legal practitioner authorized in writing to
act on his behalf; or
any official of a registered Trade Union
authorized in writing to act on behalf of the
employee; or
any Inspector; or
any person acting with the permission of the
Authority.
31. Penalties for certain Offences
Section 22 of the Act, lays down that an employer shall be
punishable with imprisonment for a term which may extend to six
months or with fine which may extend to five hundred rupees or
with both, if he –
pays to any employee less than the minimum rates of wages fixed
or less than the amount due to him under the provisions of the Act;
or
contravenes any rule or order made under Section 13.
In imposing any fine for an offence, the court shall take into
consideration the amount of any compensation already awarded
against the accused in any proceedings taken under Section 20 of
the Act.
32. Cognizance of Offences
According to Section 22 B(1) of the Act, court shall take
cognizance of a complaint when application is authorized by
the Appropriate Government, or on a complaint made by or
with the sanction of an Inspector.
Section 22 B(2) of the Act, requires that for taking
cognizance of an offence complaint has to be made within
one month of the grant of sanction by the Appropriate
Government or within six months from the date on which
the offence has been alleged to have been committed.
33. Offences by Companies
According to Section 22-C of the Act, if an offence is
committed under Minimum Wages Act by a company,
then the company as well as the person who at the
time of the commission of offence was in charge of
and was responsible for the conduct of the business is
deemed to be guilty of the offence and shall be liable
to be punished.
34. As per Proviso to Section 22-C of the Act, no
person shall be liable to any punishment
provided if he proves that:
the offence was committed without his
knowledge; or
he exercised all due diligence to prevent the
commission of such offence.
35. Section 22-C(2) provides that such director, manager
secretary or other officer of the company is liable to be
punished where an offence under the 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 part of any director,
manager, secretary or other officer of the company.
36. Payment of undisbursed amounts due to Employees
Section 22-D of the Act requires the employer to
deposit minimum wages of the employee under
the following circumstances with the prescribed
authority and deal with the money so deposited :
on account of death of the employee before
payment of minimum wages; or
on account of whereabouts of employee not
being known.
37. Protection against attachment of Assets of
Employer with Government
As per Section 22 E of the Act, any amount
due to the employer or deposited with the
Appropriate Government shall not be liable to
attachment under any decree or order of any
court in respect of any debt or liability incurred
by the employer towards any employee
employed in connection with the contract.
38. Exemption of employer from liability in
certain cases
As per Section 23 of the Act, where an employer is
charged with an offence he is entitled to file a complaint
against the actual offender who has brought case against
him, after proving the commission of the offence by such
actual offender the employer has to prove that, –
he has used due diligence to enforce the execution of the
Act; and
the said other person committed the offence in question
without his knowledge, consent or connivance.
39. Bar of Suits
Section 24 of the Act bars the court to entertain
any suit for the recovery of wages in so far as
the sum so claimed forms the subject of an
application or has formed the subject of a
direction or has been adjudged in any
proceeding or could have been recovered by an
application under Section 20 of the Act.
40. Sec-25 Contracting out
According to Section 25 of the Act, any contract
or agreement which reduces the minimum rates of
wages or any privilege or concession fixed under
the Act shall be null and void.
Thus, Section 25 is a provision of absolute
prohibition against contracting out of the benefit
and privileges before or after the commencement
of the Minimum Wages Act.
41. Powers of Central and State Government
Power of State Government to add schedule
(sec.27) The State Government has to notify in
the Official Gazette not less than three months
of its intention to do so.
The Central Government may give directions
to a State Government as to the carrying into
execution of this Act in the State.
42. Power to make rules
prescribe the term of office of the members, the procedure to
be followed in the conduct of business, the method of voting,
the manner of filling up casual vacancies in membership, and
the quorum necessary for the transaction of business of the
committees, sub-committees and the Advisory Board;
prescribe the method of summoning witnesses, production of
documents relevant to the subject-matter of the enquiry before
the committees, sub-committees and the Advisory Board;
prescribe the mode of computation of the cash value of wages
in kind and of concessions in respect of supplies of essential
commodities at concession rates;
43. prescribe the time and conditions of payment of and
the deductions permissible from wages;
provide for giving adequate publicity to the minimum
rates of wages fixed under the Act;
provide for a day of rest in every period of seven days
and for the particulars to be entered in such registers
and records;
prescribe the number of hours of work which shall
constitute a normal working day;
44. prescribe the cases and circumstance in which an employee
employed for a period of less than the requisite number of
hours constituting a normal working day shall not be entitled
to receive wages for a full normal working day;
prescribe the form of registers and records to be maintained
and the particulars to be entered in such registers and
records;
provide for the issue of wage book and wage slips and
prescribe the manner of making and authenticating entries in
wage books and wage slips;
prescribe the powers of Inspectors for purposes of the Act;
45. regulate the scale of costs that may be allowed
in proceedings under Section 20;
prescribe the amount of court-fees payable in
respect of proceedings under Section 20; and
provide for any other matter which is to be or
may be prescribed.
