MINIMUM WAGES ACT, 1948

Introduction:
The Minimum Wages Act was passed in 1948 and it came
into force on 15th March, 1948.

“What the Minimum Wages Act purports to achieve is to

prevent exploitation of labour and for that purpose
empowers the appropriate Government to take steps to
prescribe minimum rates of wages in scheduled
industries.”

According to its preamble the Minimum Wages Act, 1948,

is an Act to provide for fixing minimum rates of wages in
certain employments. The employments are those which
are included in the schedule and are referred to as
“Scheduled Employments”.

The Act extends to whole of India.

Objectives
1. Prevention of extra hard work and toil and poverty
arising from unduly low wages.

2. Fixation of just and fair wages for preventing

industrial disputes.

3. Control of inflationary pressure.

4. Raising purchasing power with a view to speeding

up the pace of economic recovery.

5. Wage regulation as a part of national-income

distribution policy and programmes of planned
economic development

Important Definitions:
1. Appropriate Government [section 2(b)]

2. Employee [section 2(i)]

3. Employer [section 2(e)]

4. Scheduled employment [section 2(g)]

5. Wages [section 2(h)]

Fixation of Minimum Rates of Wages [section 3(1)
(a)]
Section 3 lays down that the Appropriate Government
shall fix the minimum rates of wages, payable to
employees in an employment specified in Part I and Part II
of the scheduled, and in an employment added to either
part by notification under Section 27. In case of the
employment specified in Part II of the schedule, the
minimum rates of wages may not be fixed for the entire
state. Parts of the state may be left out altogether. In
case of an employment specified in Part I, the minimum
rates of wages must be fixed for the entire state, no parts
of the state being omitted. The rates to be fixed need not
be uniform. Different rates can be fixed for different zones
or localities.

Notwithstanding the provision of Section 3(1)(a), the

“appropriate Government” may not fix minimum rates of
wages in respect of any scheduled employment in which
less than 1000 employees in the whole State are engaged.
But when it comes to its knowledge after a finding that
this number has increased to 1000 or more in such
employment, it shall fix the minimum wage rate.

Revision of Minimum Wages [section 3(1)(b)]

According to section 3(1)(b), the ‘Appropriate
Government’ may review at such intervals as it may thing
fit, such intervals, not exceeding Five years, and revise
the minimum rate of wages, if necessary. This means that
minimum wage can be revised earlier than Five years also.

Manner of Fixation/Revision of Minimum Wages

According to section 3(2), the ‘Appropriate Government’
may fix minimum rate of wages for:

(a) Time work, known as a Minimum Time Rate

(b) Piece work, known as Minimum Piece Rate

(c) A “Guaranteed Time Rate” for those employed in

Piece work for the purpose if securing to such
employees a minimum rate of wages on a time work
basis

(d) A “Over Time Rate” i.e. minimum rate whether a

time rate or a piece rate to apply in substitution for
the minimum rate which would otherwise be
applicable in respect of overtime work done by
employee.

Section 3(3) provides that different minimum rates of

wages may be fixed for –

(i) Different scheduled employments;

(ii) Different classes of work in the same scheduled

employments;

(iii) Adults, adolescents, children and apprentices;

(iv) Different localities

Further, minimum of wages may be fixed by anyone or

more of the following wage periods, namely:

(i) By the Hour,

(ii) By the Day,

(iii) By the Month, or

(iv) By such other large wage periods as may be

prescribed
Minimum Rate of Wages [section 4]
According to section 4 of the Act, any minimum rate of
wages fixed or revised by the appropriate government
under section 3 may consist of –

(i) A basic rate of wages and a special allowances at

a rate to be adjusted, at such intervals and in
such manner as the appropriate government may
direct to accord as nearly by as practicable with
variation in the cost of living Index number
applicable to such workers; or

(ii) A basic rate of wages or without the cost of living

allowance and the cash value of the concession in
respect of supplies of essential commodities at
concessional rate where so authorized; or

(iii) An all inclusive rate allowing for the basic rate,

the cost of living allowance and the cash value of
the concession, if any.

The cost of living allowances and the cash value of the

concessions in respect of supplies essential commodities
at concessional rates shall be computed by the competent
authority at such intervals and in accordance with such
directions specified or given by the appropriate
government.
Procedure for Fixing Minimum Rates of
Wages (Sec. 5)
For fixing minimum rates of wages either first time or in
revising appropriate Government is required to take either
of following 2 actions:-

∗ Appointment of committees and sub-committees

considered to be necessary for holding inquires and
advise government for fixation or revision

∗ By notification in Official Gazette, publishing own its

proposals for the information of persons likely to be
affected thereby and specify a date not less than 2
months from the date of notification for considering
such proposals.

Minimum rates of wages so considered after considering

either of these 2 procedures are to come into force on the
expiry of 2 months from the date of notification, unless
the notification specifies any other particular date.

Advisory Board (Sec. 7)

For the purpose of coordinating work of committees and
sub-committees formed under sec. 5 appropriate
Government may appoint an Advisory Board for fixing and
revising minimum rates of wages.

Central Advisory Board (Sec. 8)

For advising Central and State Government in the matters
of fixation and revision of minimum rates of wages and
other matters under this Act and for coordinating the
work of the Advisory Boards, the Central Government shall
appoint Central Advisory Boards.
Composition of Committees and Sub-
committees (Sec. 9)
While formation of any committees or sub-committees
(prescribed under sec. 5) number of employers &
employees in the scheduled employment should be equal
in number and an independent persons not exceeding 1/3rd
of the total number of members. Also, one of such
independent members is to be appointed the chairman by
the appropriate government.

Correction of Errors (Sec. 10)

∗ Any error whether clerical or/and arithmetical in any
order fixing or revising minimum rate of wages if
occurs then appropriate Government can rectify it by
issuing notification in Official Gazette.

∗ Each such notification should be brought under notice

of Advisory Board for information

Wages in Kind (Sec. 11)

Wages in Kind means compensation made in any other
form than cash.

∗ Minimum wages payable under this Act shall be paid

in cash.

∗ Where it has been the custom to pay wages wholly or

partly in kind the appropriate government being of
 the opinion that it is necessary in the circumstances
of the case may by notification in the Official Gazette
authorize the payment of minimum wages either
wholly or partly in kind

∗ If appropriate government is of the opinion that

provision should be made for the supply of essential
commodities at concession rates the appropriate
government may by notification in the Official Gazette
authorize the provision of such supplies at
concessional rates.

∗ The cash value of wages in kind and of concessions in

respect of supplies of essential commodities at
concession rates authorized under sub-sec. (2) and
(3) shall be estimated in the prescribed manner.
Payment of Minimum Rate of Wages (Sec. 12)

∗ Employers are required to pay minimum rate of wages

fixed by Government without any deductions except
those authorized to every employee engaged in
scheduled employment.
∗ Nothing contained in this section shall affect the
provisions of the Payment of Wages Act 1936 (4 of
1936).
Payments of Minimum Rates of wages and
deductions from Wages:
Employees engaged in scheduled employment are to
be paid wages at fixed rate without any deductions
except those authorized [Sec.12].

Payment of Wages Act, 1936 to Scheduled

Employments:
Both governments are empowered to direct by
notification in the official gazettes the application of all
or any of the provision of the Payment of Wages Act,
1936 with or without modification to wages payable to
employees as specified in the notification [Sec.25F].

Hours of works, Overtime and Weekly Rest:

Both governments fix normal hours of working for a
working day including one or more intervals, rest and
remuneration with respect to the day of rest in respect of
scheduled employments.

-Employees engaged on urgent work, or in any

emergency which could not have been prevented;

-Work in nature of preparatory or complimentary work

which must necessarily be carried on outside the limits
laid down for the general working in the employment;

-Employment is essentially intermittent;

-work which for technical reasons has to be completed

before duty is over;

-work which could not be carried on except at times

dependent on the irregular actions of the natural forces;
 In the case his unwillingness to work; he is not
entitled to receive wages for a full normal day [Secs.13-
16].

Miscellaneous Provisions
Claims:

As per the act Authority must be,

The Commissioner for Workmen’s Compensation, The

Government officer of the central government exercising
functions as a Labour Commissioner or officer not below
the rank of Labour Commissioner, the officer with the
experience as a Judge a Civil Court. And all are
empowered to hear and decide all claims arising out of
payments of wages less than minimum rates of wages.

Every such Authority is vested with the powers of a

Civil Court under the code of Civil Procedure 1898
[Secs.20-21] for taking evidence and enforcing the
attendance of witnesses and compelling the production
of documents.

An application for a claim may be submitted by,

Employee himself, any official of a registered trade

union authorized by the employee to act on his behalf,
any inspector, and any person acting with the permission
of the Authority.

Application is to be made within 6 months. After that

it may also be entertained if he gives particular reason
for not making application within the period.
 -The Authority after hearing the application, direct
maximum compensation not exceeding ten times the
aggregate amount of the excess withheld by the
employer.

-If application is malicious, it may direct penalty not

exceeding fifty rupees be paid to the employer by the
presenter of the application.

Payments of Undisbursed Amounts Due to Employees:

If the amount payable to employee as minimum wages

under the act cannot be paid before the death of
employee or not knowing whereabouts of employee is
deposited with the prescribed Authority [Sec.22D].

Protection against Attachment of Assets of Employer with

Government:

Any amount due to employer is deposited with the

Government to secure due performance of a contract is
not liable to attachment under any decree or order of any
court in respect of any debt incurred by the employer
other than any liability towards any employee in
connection with the aforesaid contract. [Sec.22E]

Exemption of employer from Liability in certain cases:

If an employer is charged with an offence under the

Act, he may make complaint that the actual offender is
any other person. He proves to the court that he used
due diligence to enforce the provisions of the Act, and
that the other person committed the offence without his
‘knowledge or consent’, that other person is to be
 convicted of the offence and liable to like punishment as
if he were the employer [Sec.23].

Exemptions and Exception:

The central and state Government may direct that

the provisions of the Act, whether partly or wholly, will
not apply to all or any class of employees employed in
any scheduled employment or any locality where a
scheduled employment is carried on. Scheduled
employment in a local area or to any establishment or a
part of any establishment in a scheduled employment, it
is not necessary to fix minimum wages in respect of such
employees of that class [Sec.26].

Contracting out:

An employee either relinquishes or reduces his right

to minimum rate of wages or any privilege or concession
according to him under the Act is null and void insofar as
it leads to a reduction of minimum rate of wages fixed
under this Act [Sec.25].

Registers and Records:

Every employer is required to maintain records of

employees, work performed by them, wages paid to
them, receipts given by them. The Government may
under rules provide for the issue of wage-book, wage-
slips to employees employed under scheduled
employment in respect of minimum rates of wages have
been fixed and prescribed the manner in which entries
are to be made and authenticated in such wage-books by
the employer [Sec.18].
Penalties and Procedures:

Payment is less than minimum rates fixed of wages

due to them under the Act or contravention of any rule
relating to hours for normal working days [Sec.13] is
punishable with imprisonment which may extend to 6
months or with fine which may extend Rs.500 or with
both [Sec22].

Contravention by the employer of any other provision

of the Act made under it is punishable with fine which
may extend up to Rs.500 [Sec.22A].

If the Claim is malicious, he may be punished with

fine not extending Rs.50 which is payable to employer
[Sec.24(4)].

Power of the Central and State Governments to make rules:

The central government is empowered to make rules

prescribing the term of office of the members the
procedures to be followed in the conduct of business, the
method of voting and the manner of filling up casual
vacancies in membership [Sec.29].

 WORKING
Schedule of the act & minimum wages for employees
contained only 13 categories of employment
( including agriculture)

The central govt. had added more than 30 categories

of mines in the schedule

 Minimum wages(31-12-1993)

Karnataka 6.00(min. wage)

Maharashtra 64.44(max. wage)
Tripura 7(No. Of employments)
Orissa 79(No. Of employments)

 Minimum wages(01-10-2001)

Maharashtra 8.64(min. wage)

West Bengal 165.78(max. wage)
Mizoram 3(No. Of employments)
Orissa 83(No. Of employments)
 Minimum wages in Gujarat

YEAR (No. Of MIN. WAGE MAX. WAGE

employment
s)
1931 45 (9th ) 15 (14/25) 39.05(9/25)
2001 51 (10th ) 64.80(4/25) 95.40(7/25)

 Minimum wages in Gujarat

YEAR (No. Of MIN. MAX.

employme WAGE WAGE
nts)
1931 40 19.82 37.37
2001 45 52 124.61

 DIFFICULTIES

1) In organized industry workers are in receipt of

diff. Kinds of allowances and other benefits but in not
under scheduled employment

2) The enforcement of the act has been a very

difficult task from the beginning & so many
irregularities are there such as
 1985 6 lacs

(only by the labour

office of chief commissioner)

1992 45 thousand

1993 44 thousand

1994 1 lac

1996 1.33 lacs

1997 1.31 lacs

1998 1.4 lacs

1999 1.5 lacs

2000 1.8 lacs

During 1992-96 lacs of irregularities detected

and rectified in the state BIHAR.

 AN APPRAISAL
The act was related to do something new and
revolutionary & based on philosophy that

“WAGES CAN’T BE DETERMINED ENTIRELY BY

MARKET FORCES”

But there are certain deficiencies in legislation and in

implementation.

1) THERE IS NO CRITERIA WHICH WILL GUIDE GOVT.

& MINIMUM WAGES COMMITTES IN THE FIXATION OF
MINIMUM WAGES

Same job-same location-diff. wages

In India concept on minimum wages is given by THE

FAIR WAGES COMMITTE and 15TH SESSION OF INDIAN
LABOUR CONFERENCE & they believe that “WAGES
SHOLD NOT BE PROVEDED ONLY FOR SUSTAINANCE OF
LIFE BUT ASO FOR EDUCATION MEDICAL REQIRMENTS
& AMENITIES ”

15TH SESSION OF INDIAN LABOUR CONFERENCE has

introduced concept of “NEED BASED MINIMUM WAGE”
which includes food, clothing, housing, and other
expenses of workers and their families.

But in some cases because of low rates, income

remains below than income needed for determination
of poverty line.
 2) The inclusion of agriculture in the schedule of
the act is very progressive step but it is beset with
numerous pit-falls and difficulties

IT is because of these handicaps that most of the state

govt. has not been wholly successfully in fixing and
implementing minimum rates of wages for agricultural
operations.

Even where wages have been fixed, their payment in

many cases is far off from reality.

DIFFICULTIES RELATED TO AGRICULTURE IN INDIA

• Immense scale wide area enormously large no. of
workers to be covered;

• Large no. of small size of farmers who are

illiterate and have no past records;

• Multilateral relationship between agricultural

employer and his employees;

3) The revision of minimum rates of wages has generally

not been regulated. According to minimum wage Act 1948
the provision of act should be prescribed at least once in
every 3 years.

4) The main objective of the act was “prevention of

sweating”, but now there is a case for deleting
unemployment from the schedule of the act when
conditions of sweating no longer exist.

In spite of these deficiencies and the difficulties in

enforcement, the act continues to lay down useful
minimum standard relating to rates of wages.
 Equal Remuneration Act, 1976
Applicability:
• Applies to the whole of India

Duty of employer to pay Equal Remuneration

(Section 4)
 No employer shall pay to any worker, employed by
him in an establishment or employment,
remuneration, whether payable in cash or in kind, at
rates less favorable than those at which remuneration
is paid by him to the workers of the opposite sex in
such establishment or employment for performing the
same work or work of a similar nature.

 No employer shall, for the purpose of complying with

the provisions of sub-section (1), reduce the rate of
remuneration of any worker.

 Where, in an establishment or employment, the rates

of remuneration payable before the commencement
of this Act for men and women workers for the same
work or work of a similar nature are different only on
the ground of sex, then the higher (in cases where
there are only two rates), or, as the case may be, the
highest (in cases where there are only two rates), of
such rates shall be the rate at which remuneration
shall be payable, on and from such commencement,
to such men and women workers: Provided that
nothing in this sub-section shall be deemed to entitle
 a worker to the revision of the rate of remuneration
payable to him or her with reference to the service
rendered by him or her before the commencement of
this Act.

Prohibition of Discrimination in recruitment or

other conditions of services (Section 5)
 On and from the commencement of this Act, no
employer shall, while making recruitment for the
same work or work of a similar nature, 2[or in any
condition of service subsequent to recruitment such
as promotions, training or transfer], make any
discrimination against women except where the
employment of women in such work is prohibited or
restrictedly or under any law for the time being in
force.

 Provided that the provisions of this section shall not

affect any priority or reservation for scheduled castes
or scheduled tribes, ex-servicemen, retrenched
employees of any other class or category of persons
in the matter of recruitment to the posts in and
establishment or employment.

Advisory Committee (Section 6)

 For the purpose of providing increasing employment
opportunities for women, the appropriate
Government shall constitute one or more Advisory
Committees to advise it with regard to the extent to
which women may be employed in such
establishments or employments as the Central
Government may, by notification, specify in this
behalf.

 Every Advisory Committee shall consist of not less

than ten persons, to be nominated by the appropriate
Government, of which one-half shall be women.

 In tendering its advice, the Advisory Committee shall

have regard to the number of women employed in the
concerned establishment or employment, the nature
of work, hours of work, suitability of women for
employment, as the case may be, the need for
providing increasing employment opportunities for
women, including part-time employment, and such
other relevant factors as the Committee may think fit.

 The Advisory Committee shall regulate its own

procedure.

 The appropriate Government may, after considering

the advice tendered to it by the Advisory Committee
and after giving to the persons concerned in the
 establishment or employment an opportunity to make
representations, issue such directions in respect of
employment of women workers, as the appropriate
Government may think fit.

Power of appropriate Government to appoint

authorities for hearing and deciding claims and
complaints (Section 7)
 The appropriate Government may, by notification,
appoint such officers, not below the rank of a Labour
Officer, as it thinks fit to be the authorities for the
purpose of hearing and deciding—

(a) Complaints with regard to the contravention of

any provision of this Act

(b) claims arising out of non-payment of wages at

equal rates to men and women workers for the
same work or work of a similar nature, and may, by
the same or subsequent notification, define the
local limits within which each, such authority shall
exercise its jurisdiction.

 Every complaint or claim referred to in sub-

section (1) shall be made in such manner as may be
prescribed.

 If any question arises as to whether two or more

works are of the same nature or of a similar nature, it
shall be decided by the authority appointed.

 Where a complaint or claim is made to the authority

appointed it may, after giving the applicant and the
 employer an opportunity of being heard, and after
such inquiry as it may consider necessary, direct,

(i) In the case of a claim arising out of a non-payment

of wages at equal rates to men and women workers
for the same work or work of a similar nature, that
payment be made to the worker of the amount by
which the wages payable to him exceed the amount
actually paid

(ii) in the case of complaint, that adequate steps be

taken by the employer so as to ensure that there is
no contravention of any provision of this Act.

 Every authority appointed shall have all the powers

of a Civil Court under the Code of Civil Procedure,
1908 (5 of 1908), for the purpose of taking evidence
and of enforcing the attendance of witnesses and
compelling the production of documents.

 Any employer or worker aggrieved by any order

made by an authority appointed, on a complaint or
claim may, within thirty days from the date of the
order, prefer an appeal to such authority as the
appropriate Government may, by notification, specify
in this behalf, and that authority may, after hearing
the appeal, confirm, modify or reverse the order
appealed against and no further appeal shall lie
against the order made by such authority.
 MAINTAINANCE OF REGISTER
As per Sec (8) every employer is required to maintain a
proper register in regards to the employees.

INSPECTORS

 He has no entry barriers in factory premises.

 He can any time check the register and documents of

employer.

 To see whether the workers are complying with the

acts or not.

 He can take extracts from registers also for his

reference(sec.9)

PENALTIES

Following are the situations considered to be offensive

This situation is punishable with simple imprisonment for

a term may be extended to a month or a fine of 10,000 or
both,

 Failure in maintaining registers relating to

employees.
  Failure in producing the same when demanded.

 Refusal or omission of the employer to give evidence

or preventing his worker in charge of establishment.

 Refusal to give any information.

The other following offenses are punishable with fine not

less than 10,000 but not more than 20,000 or with
imprisonment of not less than 3 months but not more than
one year or both for first time and it may extend to 2
years for second time,

 Making any recruitment in contravention of the act.

 Making differential payment to men and women for

same work and of same nature.

 Making any discrimination between men and women

in contravention of the provision of act.

 Failing to carry out any direction made by the

appropriate Govt. in regards to prohibition of
discrimination in recruitment of men and women.

COGNIZANCE AND TRIAL OFFENCES

OTHER PROVISIONS

 Power to make rules

 Power of central Govt. to give direction.

AN ASSESSMENT

THANKYOU