The Minimum Wages Act, 1948: A Comprehensive Guide with State-Specific Variations

The Minimum Wages Act, 1948, is a pivotal piece of legislation in India designed to ensure that workers receive a minimum level of wages, safeguarding them from exploitation and poverty. This Act empowers both the Central and State Governments to fix and revise minimum wages for various scheduled employments. This article provides a detailed overview of the Act, highlighting key provisions and state-specific amendments.

Key Definitions (Section 2):

• Adolescent: A person who has completed their fourteenth year but not their eighteenth year.

• Adult: A person who has completed their eighteenth year.

• Appropriate Government: The Central Government for employments under its authority, mines, oilfields, major ports, and central corporations; the State Government for other scheduled employments.

• Child: A person who has not completed their fourteenth year.

• Competent Authority: An authority appointed by the appropriate government to ascertain the cost of living index number.

• Cost of Living Index Number: The index number ascertained and declared by the competent authority to reflect the cost of living for employees in scheduled employments.

• Employer: Any person who employs one or more employees in a scheduled employment, including managers, heads of departments, and those responsible for supervision and payment of wages.

• Prescribed: Means prescribed by rules made under this Act.

• Scheduled Employment: An employment specified in the Schedule or any process or branch of work forming part of such employment.

• Wages: All remuneration capable of being expressed in terms of money, including house rent allowance, but excluding certain allowances, contributions, and gratuities.

• Employee: Any person employed for hire or reward, including out-workers, but excluding members of the Armed Forces.

Fixing of Minimum Rates of Wages (Section 3):

• The appropriate government is empowered to fix minimum rates of wages for employees in scheduled employments.

• Minimum wages can be fixed for the whole state or a part of the state, or for specific classes of employees.

• The appropriate government must review and revise minimum wages at intervals not exceeding five years.

• If a review is not done within five years, the existing rates continue until revised.

• The government may refrain from fixing minimum wages for employments with less than 1000 employees, but must fix them if the number rises above 1000.

• Minimum rates of wages can be fixed as a minimum time rate, a minimum piece rate, a guaranteed time rate, or an overtime rate.

• Different minimum rates of wages can be fixed for different employments, classes of work, age groups, and localities.

• Minimum wages can be fixed for different wage periods, such as hourly, daily, monthly, or other larger periods.

Minimum Rate of Wages (Section 4):

• Minimum wages can consist of a basic rate of wages and a special allowance linked to the cost of living index number, or a basic rate with or without a cost of living allowance and the cash value of concessions, or an all-inclusive rate.

• The cost of living allowance and the cash value of concessions are computed by the competent authority.

Procedure for Fixing and Revising Minimum Wages (Section 5):

• The appropriate government can either appoint committees and sub-committees to advise on fixation or revision of minimum wages, or publish proposals in the Official Gazette and invite representations.

• After considering the advice or representations, the government fixes or revises minimum wages, which come into force after three months from the date of notification.

• The government must consult the Advisory Board when revising minimum wages using the notification method.

Advisory Board (Section 7):

• The appropriate government appoints an Advisory Board to coordinate the work of committees and advise on minimum wages.

Central Advisory Board (Section 8):

• The Central Government appoints a Central Advisory Board to advise both the Central and State Governments on minimum wages and to coordinate the work of Advisory Boards.

• The board consists of equal numbers of employer and employee representatives, and independent members.

Composition of Committees (Section 9):

• Committees, sub-committees, and the Advisory Board consist of equal numbers of employer and employee representatives, and independent members.

Correction of Errors (Section 10):

• The appropriate government can correct clerical or arithmetical errors in orders fixing or revising minimum wages.

Wages in Kind (Section 11):

• Minimum wages must be paid in cash, but payment in kind can be authorized by the government in certain circumstances.

• The government can also authorize the supply of essential commodities at concession rates.

Payment of Minimum Rates of Wages (Section 12):

• Employers must pay wages at rates not less than the minimum rates fixed by the government.

• No deductions are allowed except as authorized.

Fixing Hours for a Normal Working Day (Section 13):

• The appropriate government can fix the number of hours constituting a normal working day, provide for a day of rest, and provide for overtime payment.

• These provisions may be relaxed for certain types of work, such as urgent, preparatory, intermittent, or technically demanding work.

Overtime (Section 14):

• Employers must pay overtime wages at a rate higher than the normal rate for work exceeding the normal working day.

Wages of Worker Who Works for Less Than Normal Working Day (Section 15):

• Employees working less than a normal working day are entitled to receive wages as if they had worked a full day, unless their failure to work is due to their unwillingness.

Wages for Two or More Classes of Work (Section 16):

• If an employee does multiple classes of work with different minimum rates, they must be paid at the rate applicable to each class of work.

Minimum Time Rate Wages for Piece Work (Section 17):

• If an employee is employed on piece work, they must be paid at not less than the minimum time rate.

Maintenance of Registers and Records (Section 18):

• Employers must maintain registers and records of employees, work performed, wages paid, and other prescribed particulars.

Inspectors (Section 19):

• The appropriate government can appoint inspectors to oversee the implementation of the Act.

• Inspectors have the power to enter premises, examine records, question employees, and seize documents.

Claims (Section 20):

• Employees can file claims for less than minimum wages or for unpaid wages with the appointed authority.

• The authority can direct payment of the shortfall and compensation.

Single Application in Respect of a Number of Employees (Section 21):

• A single application can be filed on behalf of multiple employees.

Penalties for Certain Offences (Section 22):

• Employers who pay less than minimum wages or violate rules under Section 13 are punishable with imprisonment or fine.

General Provision for Punishment of Other Offences (Section 22A):

• Employers who contravene any other provision of the Act are punishable with a fine.

Cognizance of Offences (Section 22B):

• Courts can only take cognizance of complaints with proper authorization or sanction.

Offences by Companies (Section 22C):

• If a company commits an offense, those in charge of the company’s business are also deemed guilty.

Payment of Undisbursed Amounts Due to Employees (Section 22D):

• Undisbursed amounts due to employees must be deposited with the prescribed authority.

Protection Against Attachment of Assets of Employer (Section 22E):

• Assets deposited by an employer with the government are protected from attachment for debts unrelated to the contract.

Application of Payment of Wages Act, 1936 (Section 22F):

• The government can apply provisions of the Payment of Wages Act, 1936, to scheduled employments.

Exemption of Employer from Liability in Certain Cases (Section 23):

• Employers can be exempted from liability if they prove that they took due diligence and the offense was committed without their knowledge.

Bar of Suits (Section 24):

• Suits for recovery of wages are barred if an application has been made under Section 20.

Contracting Out (Section 25):

• Agreements that reduce an employee’s right to minimum wages are null and void.

Exemptions and Exceptions (Section 26):

• The government can exempt certain employees or establishments from the Act.

Power of State Government to Add to Schedule (Section 27):

• The State Government can add employments to the Schedule.

Power of Central Government to Give Directions (Section 28):

• The Central Government can give directions to State Governments for the execution of the Act.

Power of Central Government to Make Rules (Section 29):

• The Central Government can make rules regarding the functioning of the Central Advisory Board.

Power of Appropriate Government to Make Rules (Section 30):

• The appropriate government can make rules for carrying out the purposes of the Act.

State-Specific Amendments:

The PDF includes various state-specific amendments, which mainly focus on:

• Madhya Pradesh:

  • Includes officers of the government as independent members of committees.

  • Allows for the extension of time limits for fixing minimum wages.

  • Allows for the fixing of minimum wages for parts of the state or specified classes of employees.

  • Requires employers to display notices of work hours and overtime.

  • Allows for the appointment of a Chief Inspector.

  • Provides for the liability of principals in certain cases.

• Maharashtra:

  • Includes a definition of “employee” to include those who have ceased to be employees due to certain reasons.

  • Allows for the fixing of minimum wages for parts of the state or specified classes of employees.

  • Includes attendance cards in the maintenance of records.

• Bihar:

  • Allows for the payment of higher wages if they were already being paid before the notification.

  • Allows for the compounding of offenses.

  • Allows for the transfer of cases between authorities.

• Gujarat:

  • Allows for the relaxation of residential requirements for certain persons.

  • Allows for the exemption of certain classes of persons from the residential requirement.

• Kerala:

  • Substitutes “State Government” for “Appropriate Government” in certain sections.

  • Allows for the fixing of minimum wages for specific localities or classes of employees.

• Rajasthan:

  • Allows for the appointment of a Vikas Adhikari as an authority.

Conclusion:

The Minimum Wages Act, 1948, is a vital piece of legislation that ensures fair wages for workers in India. The Act provides a framework for setting and revising minimum wages, and the various state-specific amendments reflect the diverse economic and social contexts across the country. Understanding the Act and its nuances is crucial for both employers and employees to ensure that workers receive their rightful dues.