The Minimum Wages Act is aimed at the prevention of exploitation of labour in industries, based on the Geneva Convention 1928,

International Labour Code (Articles 223 to 228). The Act applies to the whole of India. It authorises the Central and State Governments to fix minimum rates of wages payable to the employees in a select number of sweated industries.

In the cases of any scheduled employment, carried on by, or under the authority of, the central or a railway administration, or in relation to a mine, oilfield or major port or any corporation established by a Central Act , the Central Government is the appropriate government. In the cases of any other scheduled employment, however, the State Government is the appropriate government. Scheduled employment means an employment specified in the Schedule or any process or branch of work forming part of such employment.

Employee means any person who is employed for hire or reward to do any work, skilled or unskilled, manual or clerical, in a scheduled employment in respect of which the minimum rates of wages have been fixed. The term employee also includes an outside (job) worker. It further includes an employee, declared to be an employee by the appropriate government (State or Central Government, as the case may be). The term employee, however, does not include any member of the Armed Forces of the Union (Central Government).

The term wages comprises all remuneration, payable to the employee, which can be expressed in terms of money. It also includes house rent allowance. But it does not include the following: (a) The value of any house accommodation, supply of light, water, medical attendance or any other amenity or any service excluded by general or specific order of the appropriate government (b) Any contribution by the employee to any pension fund or provident fund or any scheme of social insurance (c) Any travelling allowance or the value of any travelling concession (d) Any sum paid to the person employed to defray social expenses entailed on him by the nature of his employment (e) Any gratuity payable on discharge

Employer means any person who employs, whether directly or indirectly, himself or for any other person, one or more persons in any scheduled employment in respect of which minimum wages have been fixed under the Act.

The appropriate government shall fix the minimum rates of wages, payable to the employees specified in Part I and Part II of the Schedule, and in an employment added to either of the two parts by notification in the Official Gazette under Section 27. The appropriate government may, in respect of the employees, employed in an employment specified in Part II of the Schedule, instead of fixing the minimum rates of wages for the entire State, may fix such rates for a part of the State or for any specified class or classes of such employment in the whole State or part thereof. The appropriate government should also review at such intervals, not exceeding five years, the minimum rates of wages so fixed and should revise the minimum rates of wages, if necessary.

Minimum time rate is the minimum rate of wages for the timely work. Minimum piece rate is the minimum rate of wages for piece-work.

Guaranteed time rate is the minimum rate of remuneration to apply in the cases of such employees employed on piece work for the purpose of securing such employees a minimum rate of wages on a time work basis. Overtime rate is the minimum rate (whether a time rate or a piece rate) to apply in substitution of the minimum rate, which would otherwise be applicable in respect of the overtime work done by the employees.

Different minimum rates of wages can be fixed for the employees in the following different classes of employment: (a)Employees in scheduled employment (b)Employees in different classes of work in the same scheduled employment (c)Employees in different localities

Moreover, for fixing or revising the minimum rates of wages, the following wage periods may be considered: (a)By the hour (b)By the day (c)By the month (d)For other such large wage period as may be prescribed

Statutory minimum wage refers to a wage rate, determined by the employer in accordance with the prescribed procedure and the relevant provisions of the Act. The employer is obliged to pay such wage rate to the employees. This provision aims at avoiding the possibility of labour exploitation.

Minimum wages (or bare minimum wages) refers to the lowest possible level of wages. That is, it comes somewhere between the living wages and the fair wages. The Committee of Fair Wages 1948 has defined the minimum wage as the wage which must provide not only for the bare sustenance of life, but for the preservation of the efficiency of the worker. For this purpose, the minimum wage must provide for some measure of education, medical requirements and amenities, for his entire family.

The Committee of Fair Wages has defined the fair wage as the wage which is above the minimum wage and below the living wage. It is, thus, very difficult to set the minimum wage because the cost of living and the living conditions differs from place to place. Accordingly, a way out has been evolved in that while fixing the fair wages, the following factors should be taken into account: (a) The productivity of the labour (b) The nature and place of the industry in the economy (c) The prevailing rates of wages in similar industries (d) The prevailing rates of wages, in similar and equivalent (i.e. at par) society (e) The level of national income

The Committee of Fair Wages has defined the living wage as the wage that enables the earner to provide for himself and his family not only the basic essentials of food, clothing and shelter, but a measure of frugal comfort, including education for his children, protection against ill health, requirements of essential social needs and a measure of insurance against the more important misfortunes, including the old age.

Thus, we see that the living wage is the highest remuneration provided to the employee to enable him: (a) To maintain a reasonably good standard of living (b) To ensure good health for the employee as also for his family (c) To educate his children (d) To protect the family against misfortunes and solve the old age financial problems of the employee

The two methods of fixing and revising the minimum rate of wages are: (a)Appointment of a Committee (b)Publication in the Official Gazette The objective of these methods is to enable the appropriate Government to arrive at a balanced consensus in respect of fixing or revising the minimum wage rate.

Under the method of appointment of a Committee, the appropriate Government appoints committees and as many sub-committees as it may consider necessary, to hold enquiries and advise the appropriate Government concerned accordingly in regard to the fixation or revision of the minimum rate of wages.

Under the method of publication (notification) in the Official Gazette, however, the appropriate Government shall, by notification in the Official Gazette, make its proposals public for the information of the persons likely to be affected by the fixation or revision of the minimum rates of wages. The date on and from which such proposal will become effective should also be specified therein.

Thereafter, on consideration of the recommendations and advice of the committee or all the representations made in respect thereof, the appropriate Government shall, by notification in the Official Gazette, fix or revise the minimum rates of wages in respect of each scheduled employment. Such fixation or revision of the minimum rates of wages shall become effective on expiry of three months from the date of the issue (publication) of the notification in the Official Gazette, unless the notification provides otherwise. But then, in this case if the appropriate Government proposes to revise the minimum rates of wages, it should consult the Advisory Board. But the appropriate Government is not bound to accept the recommendations of the committees as these are only recommendatory in nature.

As per Section 7, the Advisory Board is constituted by the appropriate Government for the purpose of coordinating the work of the Committees and Subcommittees, appointed under Section 5, and advising the respective Governments in the matter pertaining to the fixation and revision of the minimum rates of wages. The Central Government appoints a Central Advisory Board for advising the Central and State Governments in the matters of fixation and revision of the minimum rates of wages and the other matters in the Act, as also for coordinating the work of the Advisory Boards.

It consists of the persons nominated by the Central Government representing the employees and the employers in the scheduled appointment. Such persons (representing the employees and the employers) should be equal in number as also independent persons, and should not exceed one third of its total number of its members. Further, one of the independent persons is appointed by the Central Government as the Chairman/Chairperson of the Board. Moreover, the Central Government reserves the right to prescribe the term of office of the members of the Board, the method of voting, the procedure to be followed, the manner of filling up the casual vacancies in the membership, and the quorum necessary for transacting the business of the Central Advisory Board.

If any worker works for less than the normal working days, and the wages have been fixed for a day, he shall be entitled to receive his wages for that day, as if he had worked for a full normal working day. But he shall not receive wages for the full normal working days in the following circumstances: (a) If his failure to work is caused by his own unwillingness to work, and not by the failure of the employer to provide him work (b) Such other cases and circumstances as may be prescribed

An employee, whose minimum rate of wages has been fixed under the Act for the number of hours, days or any longer wage period as may be prescribed, works on any day in excess of the number of hours constituting a normal working day, he will be paid for every hour or part thereof in excess of his so working, at the overtime rate fixed under the Act or under any other law of the appropriate Government concerned for the time being in force, whichever is higher.