The Minimum Wages Act 1948

The Minimum Wages Act 1948

• The Act came into force after World War II in 1948
• Minimum Wages Act 1948 is a legislative labor law that
stipulates wages for both skilled and unskilled laborers in
India.
• The Minimum Wages Act, 1948 is a Central legislation
aimed at statutory fixation of minimum rates of wages in the
employments where sweated labour is prevalent with
possibility for exploitation of unorganized labour.
• The provisions of the Act are intended to achieve the object
of doing social justice to workmen employed in the
scheduled employments by prescribing minimum rates of
wages for them.
• Dr. B.R. Ambedkar drafted the Minimum Wages Bill, on
11th April 1946 the bill was introduced and enforced
 Objectives
• To ensure that the employee can have the basic
• To ensure that statutory fixation of minimum wages to prevent exploitation
of labour.
• To ensure that the labourers have a minimum standard of life.
• To ensure a secure and adequate living wage for all laborers in the interest of
the public.
• To bring social justice.
• To ensure that the workers can meet their daily needs, physical necessity,
proper health and comfort.
• To provide for periodic revision of minimum wages fixed.
• To provide for the appointment of an Advisory Committee and boards with
an equal number of representatives from employers and employees.
 Importance
•Minimum wages have been defined as “the minimum amount of
remuneration that an employer is required to pay wage earners for
the work performed during a given period, which cannot be
reduced by collective agreement or an individual contract”.
•The purpose of minimum wages is to protect workers against
unduly low pay. They help ensure a just and equitable share of the
fruits of progress to all, and a minimum living wage to all who are
employed and in need of such protection.
•Minimum wages can also be one element of a policy to overcome
poverty and reduce inequality, including those between men and
women, by promoting the right to equal remuneration for work of
equal value.
 Scope and Applicability
• The Act applies to the whole of India including Jammu
and Kashmir. The provision of the Minimum Wages
Act, 1948 are applicable to every employer that employs
more than 1000 employees in a state.
• The provisions of the Act do not apply to the employees
undertaken by the central government or railways unless
the same has been consented by the central government.
 5 elements Considered while fixing
Minimum Wages
• For the purpose of fixation of minimum wages, a family is
taken, as a norm, to include three units (one earner, wife and
children)
• Dr. Aykrovd’s prescription of the average of 2700 calories of
nutrition may be taken as the standard for calculating the
minimum nutritional requirements.
• Provision of 72 yards of cloth by considering a family as four
units in connection with the requirements of 18 yards of cloth
per capita, per annum.
• For the purposes of fixation of house rent, the rates of rent
granted by Industrial Housing Plan may be considered.
• 25 per cent of the minimum wages may be ear-marked for
meeting the expense on fuel, light and other ancillaries.
 Salient Features of the Act
•The Act specified minimum wages for all government sector employees including central
and state government.
•The minimum wages is equal to minimum payment + Special allowances including house
rent allowances.
•The wage-fixing mechanism according to the act is minimum wage rate, minimum piece
rate, guaranteed time rate and price rate applicable to overtime.
•There are different classes for fixing minimum wages including different scheduled
employments, different classes of work in the same scheduled employment, adults,
adolescents, children, apprentices and different localities.
•The food requirement must be ascertained by the regular calorie intake by the family.
•The minimum wages must be revised every five years and the same has to be announced
every six months.
•The regional labour commission shall be the authority for claiming the remedy under
section 20 of the minimum wages act, 1948.
 Minimum Wages
• Minimum wages have been defined as “the minimum
amount of remuneration that an employer is required
to pay wage earners for the work performed during a
given period, which cannot be reduced by collective
agreement or an individual contract.
• This definition refers to the binding nature of
minimum wages, regardless of the method of fixing
them. Minimum wages can be set by statute, decision
of a competent authority, a wage board, a wage
council, or by industrial or labour courts or tribunals.
Minimum wages can also be set by giving the force of
law to provisions of collective agreements.
 Fair Wage
• The  concept of fair wage  is linked with the capacity of
the industry to  pay. The Committee has defined fair wage
as follows:
• “Fair wage is the wage which is above the minimum wage
but below the  living wage. The lower limit of the fair
wage is obviously the minimum  wage: the upper limit is
to be set by the capacity of the industry to pay. “
• Thus, fair wage depends on different variables affecting
wage  determination. Such factors are labour productivity
prevailing wage rates, the  level of national income and its
distribution and the capacity of industry to pay.  At
present, the concept of fair wages is followed by the most
business  organizations.
 Living Wage
• Along with the minimum wage the Committee on Fair Wages has
given  the concept of living wage which has been defined as follows:
• “A living wage is one which should enable the earner to provide for
himself and  his family not only the bare essentials of food, clothing
and shelter but a  measure of frugal comfort including education for
his children, protection  against ill-health, requirements of essential
social needs and a measure of  insurance against the more important
misfortunes including old age. “
• Living wage is more than the concept of minimum wage. Such a wage
is  determined keeping in view the national income and paying
capacity of  industrial sector. The Committee also observed that since
the national income  did not support the payment of living wage.