REPORT ON THE WORKING OF THE MINIMUM WAGES ACT, 1948 FOR THE YEAR 2001

I   INTRODUCTION

The 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. 

The 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. 

II   Main provisions under the Act

(1)     Fixing of minimum rates of wages

(a)     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.

(b)     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 larger period.

(2)     Minimum rate of wages

Any minimum rate of wages fixed or revised may consist of

(i)         a basic rate of wages and a special allowance.

(ii)       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 concessional rates.

(iii)      an all inclusive rate allowing for the basic rate, the cost of living allowance and the cash value of concessions.

(3)   Procedure 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 Government.

(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.  

(6)     Fixing 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

(a)               fix the number of hours of work which shall constitute a normal working day inclusive of one or more specified intervals.

(b)               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.

(c)               provide for payment for work on a day of rest at a rate not less than the overtime rate.

(7)     Overtime

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.

(8)      Wages 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.

(9)     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  particulars.

(10)   Inspections

The appropriate Government may, by notification in the official Gazette, appoint inspectors for the purpose of this Act and define the local limits of their functions.

(11)   Claims

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.

(12)    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. 

III   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.

(i)    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)

(ii)    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)

(iii)    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.

(iv)    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.

(v)     Minimum Wage Rates in Scheduled Employments  in Central Sphere / States /

          Union Territories

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.

It 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. 

(vi)      Submission of Returns

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.

(vii)    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.