Minimum Wages Act

Procedure For Fixing And Revising Minimum Wage

The interest of workers was kept in mind while passing the Minimum Wages Act. This legislative protection acts as a protective cushion from the exploitations of top-level officials. They often subject workers to peanut wages in exchange for hard-core labour.

Wages Act

According to Section 3 of the Minimum wages act, it is the responsibility of the appropriate government to set a specific yardstick.

Apart from fixing the minimum rate, the appropriate government shall also conduct periodic reviews within a span of five years of fixing such rates and revise the same if felt necessary.

However, according to section 3(1A), the appropriate government shall not take any such initiative in regards to scheduled employment having an employee count of less than 1000.

wages act

                   Procedure For Fixing And Revising Minimum Wage

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Procedure for Fixing and Revising Minimum Wage

Fixing Of Minimum Rates u/s 3(2)

The appropriate government can fix

  • A minimum piece rate
  • Minimum time rate
  • Overtime rate which is the minimum time or piece rate as a substitution of some other rate which would have been otherwise applied for overtime work performed by employees.
  • Guaranteed time rate which is the minimum remuneration rate applicable to employees who had been working on piece rate till now if he is again employed on time rate.

While revising or freshly fixing the wage rate under the Minimum wages act

  • Varying rates of minimum wage shall be fixed for
    • Varying classes of work under the same scheduled employment
    • Different scheduled employment
    • Various localities and
    • Apprentices, children, adolescents, and adults
  • Minimum wage rate can either be fixed by one or more of these wage periods
    • Month
    • Day
    • Hour
    • Any other larger wage-period which is deemed appropriate

Read more about Penalty for Offences under the Act (Section 20) here

Section 4 of the Minimum wages act states that the appropriate government can either fix or revise the wage rate of scheduled employments.

However, the following parts shall come under the purview of the appropriate government in such a case:

  • Basic wage rate and special allowance which should be in harmony with the cost of living index of its workers.
  • Basic wage rate either along with or without the cost of living allowance as well as the authorized cash value of concessions pertaining to the supply of essential commodities at subsidized rates.
  • A comprehensive wage rate comprising of the cash value of the concessions, cost of living allowance and the basic rate.

Alternatively, a competent authority can calculate the cash value of concessions and cost of living allowance. This has to be done after appropriate intervals and according to the directions laid down by the appropriate government.

Let us understand more about Deductions from Wages here in detail

Section 5 of Minimum Wages Act – Procedure To Fix Or Revise Minimum Wages

  • When the minimum wage rate of scheduled employment is fixed, or revised for the very first time under this act,
    • As many committees and sub-committees can be appointed as necessary.
    • A notification containing the relevant proposals can be published in the official gazette containing information related to people who might be affected by the same. A date also needs to be specified within a span of two months from the date of notification within which the proposals should be considered.
  • The appropriate government can issue a notification in the Official Gazette after considering the advice of the committee to fix or revise the minimum wage rate.

Question on Minimum Wages

 Q. State whether the statement is True or False

  1. Minimum wage rate is the same for all scheduled employments – False.
  2. A span of three years is provided minimum wage rate is reviewed after a span of three years from the date of its fixation – False.
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