Labour Laws

Minimum Wages Act, 1948

Minimum Wages Act 1948 came into force in India when India had recently gained its freedom. Labor laws made by the Britishers were exploitative in nature. Wages were low and different in every part of the country. There was no such thing as “Minimum Wages” and times were pretty bad for sweat labor.


Minimum Wages Act 1948

Minimum Wages Act 1948

It came to bring equality and justice to the blue-collar people.  Pay fixing experts were guided by the standards recommended by the Fair Wage Committee in the settlement of issues identifying with wage problems in organized industries.

The Fair Wage committee explained the core of minimum wages, but they didn’t say how to evaluate the minimum wage. The  15th session of the Indian Labor Conference explained the necessary physical requirements and health maintenance of the labors.

Scope and Objective of the Minimum Wages Act

  1.    To safeguard that the employee has a basic physical necessity, proper health, and comfort.
  2.     Ensure that the labor gets fair wages.
  3.    To ensure that the labor lives a decent life and have a respectable name in society.

Criteria for Fixing Minimum Wages

According to section 3 of the Minimum Wages Act 1948 “The Appropriate Government” will fix minimum wages. Appropriate Government can include local, State and Central Government.  This section sets the rate according to hours, days, months or any other wage period may be prescribed.

The rates to be fixed need not be uniform. Diverse rates can be fixed for various zones or areas. If the wages are fixed according to section 4 of the Payment of the Wages Act, 1936, the fixing will be done according to the Act.

Minimum Wages are fixed according to the following criteria

  1.    Time Rate – The minimum rate is fixed according to the duration of the work done by the labor.
  2.    Piece Rate – Here the minimum wage is fixed by the total number of pieces manufactured in the factory.
  3.    Overtime Rate –  Here the minimum rate is fixed by the overtime done by the labor regardless of the time or piece rate.

Wage Committee    

A wage committee shall be formed by the appropriate government, which shall consist of members from both the employer and employee side. Therefore, an independent person with having no interest in the employment scheme shall be appointed as the chairman of the wage committee. The appointment process in the Minimum Wages Act is made in this way so that there is no scope of discrimination to the labors.  

Advisory Board

Section 7 of the Minimum Wages Act,  the Advisory Board, which proposes recommendations and changes to be brought in labor laws. The advisory board proposes a recommendation to the State and Central Government in fixing the minimum wages.

According to Section 9 of the Act, it talks about the appointment of committees and subcommittees. The included members are:

  1.    A person appointed by the Appropriate Government.
  2.    Employers and employees, who belong to the scheduled employment and they shall be equal in number.
  3.    Independent persons and they shall not exceed one-third of the total number of members. An independent person will be appointed as chairman of the committee.

Wages in Kind

Section 11 says that the wages shall be paid in cash. If somewhere, the payment is done either wholly or partly and if it is a customary process, then in that the case, the government through a notification in the official gazette shall enforce the payment partly or wholly.

Consequences of Non – Compliance

Non- compliance of the Minimum wages act, i.e not paying minimum wages is a culpable offense.  Hence, violation of fixing hours also attracts the penal provision.

Imprisonment up to 5 years and a fine up to 10,000 is the maximum punishment that can be awarded. Section 22 of the Act defines the sanctions.

Solved Example on Minimum Wages Act 1948

Question: Who Can be the Chairman of the Works Committee?

  1. Member of the Employee Association.
  2. Member of the Employer’s Association.
  3. Independent Person.
  4. None of the Above.

Answer: The correct answer is C.  An independent person is appointed as a chairman so that there is no scope of a biased decision. However, the person who is appointed must be experienced and adept in labor laws

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One response to “Labour Law Compliance Rules”

  1. Aakla says:

    Thanks for sharing this information with us, I learn about labour-law-compliance-rules from your blog.

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