LABOUR LAW ASSIGNMENT

SUBMITTED TO : Ms. Mehreen Manzoor

Write an Essay on the following :

Compare and analyse the procedure and components for fixing minimum wage in India and
United states of America, China and Norway. (Compare the methodology that they use in
coming to the figure of minimum wage and also compare the criteria on which it is fixed. While
comparing this, also shed light on the kind of socio economic structures that exist in the
countries.)

Answer :

International Labour Organisation:

As per the International Labour Organisation, there are several methods of setting minimum
wages one of the leading methods has been found to be the method of collective bargaining.
However, there are very few countries that rely on this method as it involves giving the trade
unions the power to argue/ bargain as per their requirements. Often it is found that this method
ignores the minimum/ basic requirement of the workers who are in a majority. Thus , to
safeguard the rights of the workers, several countries have adopted a minimum basic wage that is
made statutorily available to the workers.

Procedure and components of fixing minimum wage in India.

The Minimum Wages Act, 1948 has the sole purpose of fixing wages in certain employments
and mandate the conditions under which the workers have to work. It is applicable to all the
establishments that employ more than one or one person under it.

Minimum wages are declared by the Central Government for industries that are directly under it
and for others by the appropriate State Government.

The components included for calculating the wages are :

 Work done in employment.

 House rent allowance.
 Doesn’t include medical attendance , supply of light , water
  Doesn’t include any amenity expressly removed by an order of the State government or
the Central Government as the case may be.
 Doesn’t include contribution of the employer towards the Pension fund or Provident fund
or any scheme of social Insurance.
 Doesn’t include any travelling allowance or the value of any travelling concession
 Doesn’t include any gratuity payable on discharge.

Updating of the Minimum wages: there is no prescribed frequency at which the Minimum wages
have to be updated , but most of the State Governments undertake the revision at least twice a
year, unlike the prior practice of updating the wages at every 1 or 3 years. The wages are to be
paid as per the site’s place, regardless of its office being elsewhere.

Procedure for calculation of minimum wage in United States of America

There first minimum wage law was enacted in the year 1938 but the rates set here were soon
obsolete after the Second World war.

The federal minimum wage provisions are contained in the Fair Labor Standards Act (FLSA).
The federal minimum wage is $7.25 per hour effective July 24, 2009. Many states also have
minimum wage laws. Some state laws provide greater employee protections; employers must
comply with both.

The minimum wage law (the FLSA) applies to employees of enterprises that have annual gross
volume of sales or business done of at least $500,000. It also applies to employees of smaller
firms if the employees are engaged in interstate commerce or in the production of goods for
commerce, such as employees who work in transportation or communications or who regularly
use the mails or telephones for interstate communications. Other persons, such as guards,
janitors, and maintenance employees who perform duties which are closely related and directly
essential to such interstate activities are also covered by the FLSA. It also applies to employees
of federal, state or local government agencies, hospitals and schools, and it generally applies to
domestic workers.

Apart from these it also contains several exemptions that may apply to certain workers.
Procedure for calculation of minimum wage in China

The Minimum wage requirement in China is variable to the factor of it being dependable on the
area concerned.

Local governments in China are required to update their minimum wages at least every few years
but have the flexibility to adjust wages according to local conditions.

Most provinces set different classes of minimum wage levels for different areas depending on the
given region’s level of development and cost of living.

For example, a higher minimum wage class for the provincial capital and the most developed
cities, and a lower class for smaller cities and rural areas.

Chinese regions often opt to increase minimum wages to keep pace with the cost of living
increases, so other regions may also adjust their wage standards later this year.

However, while China is still among the most unequal countries in the world in terms of income
inequality, it has made some progress over the past decade.

Procedure for calculation of minimum wage in Norway

Unlike several other countries in Norway, no minimum wage requirement exists. Much like
stated above, the Trade Unions in Norway negotiate the worker’s payments by the industry. Thus
the wages vary across sectors.

Norway’s trade unions are powerful establishments that aim to secure fair wages for their
workers and keep the high standard of living high.

Most smaller unions in Norway are affiliated with a larger confederation. The country has a
handful of giant union confederations – the largest numbers around 900,000 members (that’s out
of Norway’s 5.4 million population). The confederations handle collective bargaining. Their goal
is to negotiate wage levels with companies, and when they’re agreed upon, all industry workers
get the new wages, not just the union members. Since wages still aren’t universal and can vary
by skill level and age.

Most of the countries such as the USA and India have wages that are set by the Governments of
the appropriate nature and have the main components of eradication of poverty, providing social
security and imparting education. In USA, the employees are well classified on the nature of not
only their work but also on the basis of the category of workers, such as student workers, old age
workers and thus the employees there are well aware of their rights. In India, However the
scenario is different with most of the workers being in unorganized sector they are hidden from
the welfare schemes of the Government and are thus subject to exploitation such as more
strenuous work for lesser pay.

In countries such as Norway the main aim is to increase the standard of living of the workers and
thus the Trade Unions argue/bargain in that favour.

As the socio economic structure of every country differs so does the minimum wage requirement
and the fact that some countries may entirely do away with this concept.

SUBMITTED BY :

Nitish Gupta (B.B.A. L.L.B (CORPORATE LAW) BATCH -1)

SAP ID : 500061835 , ROLL NO: 57