Minimum Wages Act, 1948: A Brief Overview

Introduction

Minimum wages act came into force in India when India had recently gained its freedom. Labor laws
made by the Britishers were exploitative in nature. Wages were low and different in every part of
the country. There was no such thing as “Minimum Wages” and times were pretty bad for sweat
labor. Minimum Wages Act came into to bring equality and justice to the blue-collar people. Pay
fixing experts were guided by the standards recommended by the Fair Wage Committee in the
settlement of issues identifying with wage problems in organized industries. The Fair Wage
committee explained the core of minimum wages, but they didn’t say how to evaluate the minimum
wage. The 15th session of the Indian Labor Conference explained the necessary physical
requirements and health maintenance of the labors.

Scope and Objective of Minimum Wages

1. To safeguard that the employee has a basic physical necessity, proper health, and comfort.

2. To ensure that the labor gets fair wages.

3. To ensure that the labor lives a decent life and have a respectable name in society.

Criteria for Fixing Minimum Wages

According to section 3 of the Act “The Appropriate Government” will fix minimum wages.
Appropriate Government can include local, State and Central Government. This section sets the
rate according to hours, days, months or any other wage period may be prescribed.

The rates to be fixed need not be uniform. Diverse rates can be fixed for various zones or areas. If
the wages are fixed according to section 4 of the Payment of the Wages Act, 1936, the fixing will be
done according to the Act.

Minimum Wages are fixed according to the following criteria:

1. Time Rate – The minimum rate is fixed according to the duration of the work done by the labor.

2. Piece Rate – Here the minimum wage is fixed by the total number of pieces manufactured in the
factory.

3. Overtime Rate - Here the minimum rate is fixed by the overtime done by the labor regardless of
the time or piece rate.
Wage Committee

A wage committee shall be formed by the appropriate government, which shall consist of members
from the employer and employee side both. An independent person with having no interest in the
employment scheme shall be appointed as the chairman of the wage committee.

Advisory Board

Section 7 talks about the Advisory Board, which proposes recommendation and changes to be
brought in labor laws. Advisory board proposes a recommendation to the State and Central
Government in fixing the minimum wages. According to Section 9 of the Act, it talks about the
appointment of committees and subcommittees. The included members are:

1. A person appointed by the Appropriate Government.

2. Employer and employees, who belong to the scheduled employment and they shall be equal in
number.

3. Independent persons and they shall not exceed one-third of the total number of members. An
independent person will be appointed as chairman of the committee.

Wages in Kind

Section 11 says that the wages shall be paid in cash. If somewhere, the payment is done either
wholly or partly and if it is a customary process, then in that the case, the government through a
notification in the official gazette shall enforce the payment partly or wholly.

Consequences of Non – Compliance

Non- compliance with the act, i.e not paying minimum wages is a culpable offense. Violation of
fixing hour also attracts penal provision. Imprisonment up to 5 years and a fine up to 10,000 is the
maximum punishment which can be awarded. Section 22 of the Act defines the sanctions.