REPORT ON THE WORKING OF THE MINIMUM WAGES ACT, 1948 FOR THE YEAR 2001
minimum wages system serves a useful purpose in preventing human exploitation in
terms of payment of unduly low wage and helps in reducing inequalities in the standard of living of different social
groups of workers by statutorily prescribing minimum wage rates.
The provision of periodic review and revision of minimum wage rates have
been acting as a cushion to workers against price rise and enables them to
maintain their standard of living at a particular level.
This helps in reducing poverty and improving the position of low paid
wage earners in sweated unorganised industries.
fixation of minimum wage is the starting point in the evolution of rational wage
structure. Keeping this in view, the Government of India enacted the Minimum
Wages Act, 1948. The Act provides
for fixation / periodic revision of minimum wages in employments where labour is
vulnerable to exploitation. Under
the Act, the appropriate Government, both Centre and State can fix / revise the
minimum wages in scheduled employments falling in their respective jurisdiction. It also provides for fixation of hours of work, payment of
overtime wages besides providing penalties for offences under the Act and rules
made thereunder. The statutory
minimum wage has the force of law and it becomes obligatory on the part of the
employers not to pay below the prescribed minimum wage to its employees.
provisions under the Act
of minimum rates of wages
The appropriate Government may fix the minimum rates
of wages payable to employees
employed in an employment specified in Part - I or Part - II of the Schedule and
in an employment added to the Schedule. The
Government may review the minimum rates of wages and revise the minimum rates at
intervals not exceeding five years.
The appropriate Government may fix a minimum rate of
wages for time and for piece rate. However
different wage rates may be fixed for different scheduled employments, different
classes of work in the same scheduled employment, for adults, adolescents,
children and apprentices and for different localities and for any one or more of
the wage periods, viz., by the hour or by the day or by the month or by such
rate of wages
minimum rate of wages fixed or revised may consist of
a basic rate of wages and a special allowance.
a basic wage rate with or without cost of living allowances and the cash
value of concessions in respect of supplies of essential commodities at
an all inclusive rate allowing for the basic rate, the cost of living
allowance and the cash value of concessions.
for fixing and revising minimum wages
The appropriate Government may appoint an advisory Board for advising
it, generally in the matter of fixing and revising minimum rates of wages.
The Central Government may appoint a Central Advisory Board for the
purpose of advising the Central and State Governments in the matters of the
fixation and revision of minimum rates of wages.
The Central Advisory Board may consist of persons to be nominated by the
Central Government representing employers and employees in the scheduled
employments, in equal number and independent persons not exceeding one third of
its total number of members. One of
such independent persons would be appointed chairman of the Board by the Central
(4) Wages in kind
Minimum wages payable under this Act are to be paid in cash.
The payment of minimum wages can be made wholly or partly in kind
by notification in the official Gazette if it is customary to pay wages
wholly or partly in kind.
(5) Payment of minimum rate of wages
The employer is required to pay to every employee engaged in a scheduled
employment under him wages at a rate not less than the minimum rate of wages
fixed by the competent authority.
hours for normal working day
In regard to any scheduled employment minimum rates of wages in respect
of which have been fixed under this Act, the appropriate Government may
fix the number of hours of work which shall constitute a normal working
day inclusive of one or more specified intervals.
provide for a day of rest in every period of seven 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 days of rest.
provide for payment for work on a day of rest at a rate not less than
the overtime rate.
If any employee whose minimum rate of wages is fixed under the Act works
on any day in excess of the number of hours constituting normal working day, the
employer is required to pay him at the overtime rate fixed under this Act or
under any law of the appropriate Government for the time being in force
whichever is higher.
for two or more classes of work
If an employee does two or more classes of work to each of which a
different rate of wages is applicable, the employer is required to pay to such
employee in respect of the time respectively occupied in each such class of
work, wages at not less than the minimum time rate in respect of each class.
Maintenance of registers and records
Every employer is required to maintain such registers and records giving
particulars of employees, the work performed by them, the wages paid to them,
the receipts given by them and any other required
The appropriate Government may, by notification in the official Gazette,
appoint inspectors for the purpose of this Act and define the local limits of
The appropriate Government may appoint Labour commissioner or any other
officer with experience as a judge of a civil court or as a stipendiary
Magistrate to hear and decide for any specified areas, all claims arising out of
the payment of less than the minimum rates of wages as well as payment for days
of rest or for work done.
Penalties for Offences
Any employer who contravenes any provision of this Act shall be
punishable with imprisonment for a term, which may extend to six months or with
fine, which may extend to five hundred rupees or with both.
Statistics collected under the Minimum Wages Act, 1948
All establishments covered under the Act are required to furnish to the concerned authority (Central or State) an annual return in prescribed form as per the rules framed under the Minimum Wages Act, 1948. The Centre / State Governments in turn send a consolidated return to the Labour Bureau which compiles an all India report based on the data contained in these returns. Besides quarterly returns sent by these agencies to the Bureau are also made use of in compiling data at all India level.
Addition of New Employments
The State Governments and the Union Territories review the Scheduled Employments from time to time in their jurisdiction and add new employments in respect of which it is of the opinion that minimum rates of wages should be fixed statutorily in addition to the existing ones. During the year 2001, only two State Governments i.e. Tamil Nadu and Karnataka have added employments to the Schedule appended to the Act. (Table 1)
Fixation of Minimum Wages during 2001
During the year 2001 the minimum wages were fixed for the first time in respect of only one State i.e. Tamil Nadu. (Table 2)
Scheduled Employments and Prevailing Minimum Wage Rates
The Central Government and the different State Governments have been maintaining a set of scheduled employments for fixing minimum rates of wages under their respective jurisdiction. These scheduled employments undergo a change as and when there is an addition of an employment in the schedules appended to the Minimum Wages Act, 1948.
The details of prevailing minimum wages relating to unskilled workers fixed / revised in different scheduled employments in different States / Union Territories as on 31.12.2001 are presented in Table 3. The components of wage rates like Basic Wage and Dearness Allowance have also been presented wherever available. In some of the scheduled employments in some States / Union Territories consolidated wage rates have been fixed / revised. In some of the scheduled employments, it was noticed that more than one rate of minimum wage rates have been prescribed which indicates the minimum wages fixed / revised for different Areas / Regions / Zones in the particular State / Union Territory. Some of the States / Union Territories are yet to fix minimum rates of wages for some of the scheduled employments (new or already existing) and the names of such employments are also featuring in this Table.
Scheduled Employments and Range of Minimum Wage Rates
The total number of employments for which the minimum wage rates have been fixed / revised and the range of minimum wage rates in different State Governments / Union Territories as on 31.12.2001 have been given in Table 4.
It emerges from the table that the number of scheduled employments for which minimum wages were fixed / revised was highest in the State of Orissa (82) followed by Assam (75).
The dispersion of rates as measured by the range between the lowest
minimum wage rate and highest minimum wage rate is very wide say Rs. 8.46 as the
lowest minimum wages in the State of Maharashtra and highest minimum wage of Rs
147.96 in the State of Kerala.
Minimum Wage Rates in Scheduled Employments
in Central Sphere / States /
Table 5 depicts the comparative minimum wage rate per day prevailing in scheduled employments in Central Sphere / States / Union Territories. The main purpose of classifying this information is to (a) study the inter-State variations in the minimum wage rates in a particular scheduled employment in Central Sphere/ States/ Union Territories (b) know the number and different types of scheduled employments prevalent in each State / Union Territory for which minimum wage rates have been fixed.
could be seen that as on 31.12.2001 there were in all 300 different types of
scheduled employments all over India for which minimum wage rates have been
fixed by the Central Government / States / Union Territories.
The details regarding number of establishments covered under the Minimum Wages Act, 1948 and those submitting returns as well as average daily employment State-wise have been given in Table 6.
Enforcement of the Act
In most of the States and Union Territories, there was no machinery appointed exclusively for the enforcement of the Act but the inspection staff, appointed under other labour Acts were entrusted with the enforcement of this Act also.
The State-wise details of Inspections made, irregularities detected, prosecutions launched and claims preferred have been given in Table 7.