Minimum Wages Act

Objective
The Minimum Wages Act, 1948 has been enacted
to provide the minimum wages in certain
specified employments. The Minimum Wages Act
binds the employers to pay the minimum wages
fixed under the Act from time to time. Under the
provisions of the Act both the Central and State
Government have authority to fix, review, revise
and enforce the minimum wages to workers
employed in scheduled employment under their
respective jurisdictions.
 Applicability

• Minimum Wages Act, 1948 extends to whole

of India.
• It applies on persons employed in an
employment specified in Part I (Non-
agricultural Employment) & Part
II (Agricultural Employment) of the Schedule
to the Minimum Wages Act, 1948.
 Definition
cost of living index, in relation to employees in
any scheduled employment in respect of
which minimum rates of wages have been
fixed, means the index number ascertained
and declared by the competent authority by
notification in the Official Gazette to be the
cost of living index number applicable to
employees in such employment;
Wages means all remuneration, capable of being expressed in
terms of money, which would, if the terms of the contract of
employment, express or implied, were fulfilled, be payable to
a person employed in respect of his employment or of work
done in such employment, and includes house rent allowance,
but does not include:
(i) the value of:
(a) any house-accommodation, supply of light, water, medical
attendance, or
(b) any other amenity or any service excluded by general or
special order of the appropriate Government;
(ii) any contribution paid by the employer to any Pension Fund
or Provident Fund or under any scheme of social insurance;
(iii) any travelling allowance or the value of any travelling
concession;
(iv) any sum paid to the person employed to defray special
expenses entailed on him by the nature of his employment; or
(v) any gratuity payable on discharge;
The appropriate government may fix :
a. a minimum rate of wages for time work
b. a minimum rate of wages for piece work
c. a minimum rate of remuneration for time
rate basis (guaranteed time rate)
d. a minimum rate of wages for overtime
 Minimum rate of Wages
a. Basic rate of wages + Special allowance at a
rate adjusted with the variation in the cost of
living index number or
b. Basic rate of wages +/- cost of living
allowance + cash value of essential
commodities at concessional rates or
c. Basic rate of wages + cost of living allowances
+ cash value of the concessions
 Fixation of Minimum Wages
• Appropriate Government (Central or State, as the
case may be) has authority to fix the minimum
rate of wages in respect of employment specified
in Part I & II of the Schedule to the Act.
• The Central Government has authority to fix rate
of minimum wages for 45 sectors of
employment; whereas, the State Governments
have authority to fix rate of minimum wages
for 1596 sectors of employment in their territory.
 Penalties
• An employers who:
a. Pays to any of his employees less than the
minimum rate of wages or less than the
amount due to him
b. Contravenes any rule or order
Is punishable with imprisonment to 6 months ,
500 rupees or both.