Minimum Wages Act 1948

The concept of Minimum Wages was first evolved by ILO in 1928 With reference to
remuneration of workers in those industries where the level of wages was substantially
low and the labor was vulnerable to exploitation not well organized and was having less
effective bargaining power.
Policy to prevent employment of sweated labor in the general interest and so in
prescribing the minimum wage rate capacity of the employer need not be considered, as
the State assumes that every employer must pay the minimum wages for the employees
labor for a fixed time period.
Living Wage: A sum sufficient for the normal and reasonable needs of the average
employee living in a locality where the work under consideration is done or is to be done.
Fair Wage: it is the mean b/w the living wage and the minimum wage.
The rate of wages prevailing in an occupation is considered as fair, if it is about on par
with the average payment for tasks in other trades which are equal difficulty and
disagreeableness, which equally rare natural abilities & equally expensive training.
Minimum Wages: it must provide:
Bare subsistence of life
Preservation of the efficiency of the workers.
Object of the Act:
It was passed for the welfare of the laborers
The object of the Act is directed against exploitation of the ignorant, less organized and
less privileged members of the society by the capitalists & to prevent exploitation of the
workers.
The objective of the Act aims not only to ensure the mere physical need of the worker
that helps him in sustaining his life but also to increase his capabilities as a workman.
The minimum wages should be fixed keeping in view the preservation of the workers but
also provide for some measures of educational, medical requirement and other amenities.
Salient Features of the Act:
The act provides for the fixation of:
a. minimum time rate of wages
b. minimum piece rate
c. Guaranteed time rate
d. Overtime rate for different occupations, localities or classes of work for
adults, adolescents, children and apprentices.
The minimum rate of wages under the Act may consists of:
a. A basic rate of wages and a cost of living allowance

b. Basic rate of wages with or without the cost of living allowance and the cash
value of the concessions in respect of essential commodities supplied at
concessional rate
c. An all inclusive rate
The act requires that wages shall be paid in cash, although it empowers the appropriate
Govt to authorize the payment of minimum wages, either wholly or partly in kind in
particular cases
It lays down that the cost of living allowance and the cash value of concessions in respect
of supplies of essential commodities at concessional rate shall be computed
The act empowers the appropriate Govt to fix the number of hours of work per day, to
provide for a weekly holiday and the payment of overtime wage in regard to any
scheduled employment in respect of which minimum rate of wages have been fixed under
the Act
Scope of the Act:
According to the preamble of the Minimum Wages Act 1948:
It is an Act to provide for fixing minimum rates of wages in certain employment listed in
the schedule
The employments are those which are included in the Minimum wages Act
The act extends to the whole of India
Wages:
Remuneration capable of being expressed in terms of money, payable to a person
employed of his employment or for work doe in accordance with the terms of contract of
employment, express or implied
House rent allowance but does not include the value of any house accommodation,
supply or light, water, medical attendance or other amenity or service excluded by
general or special order of the appropriate Govt
cost of living index number in relation to employees in any scheduled employment in
respect of which minimum rates of wages have been fixed, means the number ascertained
and declared by the competent authority by notification in the Gazette to the cost of
living index number applicable to such employee
Scheduled employment means any employment specified in the schedule or any process
or branch of working forming part of such employment.
Employee:
Means any person who is employed on hire or reward; for doing skilled, unskilled,
manual or clerical work in a scheduled employment
Employer:
Means a person who employs, directly or a person who employs indirectly through
another person, either person, either on behalf of himself or any other person

Fixation of Minimum rate of Wages:

Section 3 of the Act empowers the appropriate Govt to fix the minimum rates of wages in
the manner prescribed under the act.
Minimum Rate of Wages:
As per section 4 of the act, an minimum rate of wages fixed or revised by the appropriate
Govt may consists of:
A basic rate of wages & a spl allowance at a rate to be adjusted, at such interval with the
variation in the cost of living index number applicable to such worker
A basic rate of wages or without the cost of living allowance & the cash value of the
concession in respect of supplies of essential commodities at concessional rate where so
authorized
An all inclusive rate allowing for the basic rate, the cost of living allowance and the cash
value of the concessions
Advisory Board:
Section of the Act, empowers the appropriate Govt to appoint an Advisory Board for the
purpose of;
1. Co-coordinating the work of committees and sub-committees
appointed under section 5; and
2. Advising the appropriate government in the matter of fixing and
revising minimum rates of wages.
Central advisory board
As per section 8 of the act, the central government has the responsibility to constitute a
central advisory board for the purpose of;
1. Advising the central and state governments the matters of fixation and revision of
minimum rates of wages and matters under this act; and
2. Co- coordinating the work of the advisory boards.
The board would consist of
1. Persons to be nominated by the central government representing employers and
employees in the scheduled employments in equal numbers; and
2. Independent persons not exceeding one-third of its total number of members; one of
such independent persons shall be appointed as the chairman of the board by the central
government.
Minimum wages- whether to be paid in cash or kind
As per section 11 of the act, minimum wages shall be paid in cash. But where it has been
the custom to pay wages wholly or partly in kind the appropriate government, on being
satisfied, may approve and authorize such payments. Such government can also authorize
for supply of essential value of the wages in kind or in the shape of essential commodities
on concessions.
Obligations of employer

As per section 12 of the act, payment of wages less than the minimum rate of wages
notified by the appropriate government is an offence. Where in respect of any scheduled
employment a notification under minimum rate of wages to every employee engaged in a
scheduled employment without any deductions except as may be authorized within such
time and subject to such conditions as may be prescribed.
Fixing hours for a normal working day;
Fixing of minimum rate of wages without reference to working hours may not achieve
the purpose for which waged are fixed. Hence, section 13 of the act empowers the
appropriate government to:
Fix the no of working hours which shall constitute a normal working day,
inclusive of one or more specified interval
Provide for a day of rest in every period of 7 days which shall be allowed to all
employees or to any specified class of employees and for the payment of
remuneration in respect of such day of rest
Provide payment for work on a, day of rest at a rate not less than the overtime rate
Payment for Overtime:
As per Section 14 of the Act, where an employee, whose minimum rate of wages is fixed
under the Act by the hours, works on any day in excess of the number of hours
constituting a normal working day, the employer shall pay him for every hour or part of
an hour so worked in excess at the overtime rate fixed under the Act or under any other
law of the appropriate Govt, for the time being in force, which ever is higher
Minimum time rate wages for piece work:
As per section 17 of the Act, piece rated workers are also governed by the provisions of
the Act. Where an employee is employed on piece rate has been fixed under the Act, the
employer shall pay to such employee wages at not less than the minimum time rate .
Persons appointed as Authority:
Any commissioner for workmens compensation
Any officer of central Govt exercising functions as a labor commissioner for any region
Any officer of the state govt not below the rank of a labor commissioner
Any other officer with experience as a judge of a civil court or as Stipendiary magistrate
Persons Eligible for Raising Claim:
Sub-section(2) of section 20 of the Act, provides that where an employee has any claim
that is referred to in Section 20(1) the following may apply to the authority for a
direction:
The employee himself
Any legal practitioner authorized in writing to act on his behalf
Any official of a registered Trade Union authorized in writing to act on behalf of the
employee
Any inspector; or
Any person acting with the permission of the Authority

Penalties for Certain Offences:

Section 22 of the Act, lays down that an employer shall be punishable with imprisonment
for a term which may extend to 6 months or with fine may extend to 500 Rs if he
Pays to any employee less than the minimum rates of wages fixed for that
employees class of work or less than the amount due to him under the
provision of the Act
Contravenes any rules or order made under section 13
As per provision to section 22 of the Act, un imposing any fine for an offence, the court
shall take into consideration the amount of any compensation already awarded against
the accused in any proceeding taken under section 20 of the act
Punishment for Other Offences:
Section 22 (A) of the Act, punishes the employer who is guilty of contravention of any of
the provisions or order or rule made under the Act with fine which may extend to 500 Rs.
However this punishment can be awarded only when no other penalty is provided for
such contravention by the act.
Payment of Undisbursed Amounts due to employees:
Section 22-D of the Act requires the employer to deposit minimum wages of the
employee under the following circumstances with the prescribed authority and deal with
the money so deposited in such a manner as may be prescribed on account of :
1. death of the employee before payment of minimum wages; or
2. whereabouts of employee not being known
Protection against attachment of Assets of Employer with government:
As per section 22 E of the Act, any amount due to employer or deposited with the
appropriate government by such employer shall not be liable to attachment under any
decree or order of any court in respect of any debt or liability incurred by the employer
towards any employee employed in connection with the contract.
Application of payment of Wages Act, 1936:
Section 22 (F) of the Act lays down that notwithstanding anything contained in the
payment of wages act 1936 the appropriate govt may by notification in the official
gazette direct that all or any of the provisions of the payment wages act shall with such
modifications if any as may be specified in the notification apply to employees in such
scheduled employments
Exemption of employer from liability in certain cases:
As per section 23 of the act, where an employer is charged with an offence under the Act,
he is entitled to file a complaint against the actual offender who has brought before the
court at the time appointed for hearing the charge
Bar of Suits:

Section 24 of the Act bars the court to entertain any suit for the recovery of wages in so
far as the sum so claimed forms the subject of an application or has formed the subject of
a direction or has been adjudged in any proceeding or could have been recovered by an
application under section 20 of the act.
Contracting out:
According to section 25 of the act, any contract or agreement which reduces the
minimum rates of wages or any privilege or concession fixed under the act shall be null
and void.
Thus, section 25 is a provision of absolute prohibition against contracting out of the
benefit & privileges before or after the commencement of the Minimum Wages Act.
Power of State Govt:
Section 27 of the Act empowers the appropriate govt to add either part of the schedule
any employment in respect of which it is opinion that minimum rates of wages should be
fixed under the Act and thereupon the schedule shall in its application to the state be
deemed to be amended accordingly.
Powers of Central Government:
To Give Directions:
Section 28 of the Act empowers the central govt directions to State Govt as to carrying
out execution of the Minimum Wages Act in the State
To make rules:
Section 29 of the Act empowers the Central Govt to make rules prescribing the term
office of the members, the procedure to be followed in the conduct of business, the
method of voting, the manner of filling up of casual vacancies arising in membership
Section 30 of the Act empowers the central govt to make rules for carrying out the
various purposes of the Act subject to the condition of previous publication by
notification in the official gazette.
END