Minimum Wages Act

Objective and Scope:

The Minimum Wages Act aims to establish minimum wage rates for different categories of workers and ensure fair remuneration.
Section 3: Specifies the categories of workers covered under the act, such as skilled, semi-skilled, and unskilled.
Applicability:
The act applies to all employees engaged in certain scheduled employments, as specified by the appropriate government.
Section 2: Defines “scheduled employment” and outlines the process for notification of scheduled employments by the appropriate
government.
Minimum Wages:
The act prescribes minimum wage rates for different categories of workers, which must be paid by employers.
Section 4: Empowers the appropriate government to fix and revise minimum wages.
Wage Calculation and Payment:
The act specifies rules for calculating wages, including provisions for overtime pay and deductions.
Section 5: Deals with the components of minimum wages, including basic rate and cost of living allowance.
Working Hours:
The act may include provisions related to maximum working hours and overtime compensation.
Section 9: Deals with hours of work and overtime.
Enforcement:
Government agencies are responsible for enforcing the provisions of the act, including conducting inspections and investigating
complaints.
Section 20: Deals with the appointment of inspectors and their powers to enter premises and examine records.
Penalties for Non-Compliance:
Employers found to be in violation of the act may face fines, penalties, or other legal sanctions.
Section 22: Specifies penalties for offenses under the act.
Record Keeping and Compliance:
Employers are required to maintain accurate records of wages paid to employees and provide them with written statements detailing
their wages and deductions.
Section 18: Deals with the maintenance of registers and records by employers.
Revision of Rates:
Minimum wage rates may be revised periodically to account for changes in economic conditions and cost of living.
Section 9(3): Empowers the appropriate government to review and revise minimum wages at intervals not exceeding five years.
Social Justice and Fair Compensation:
The act serves to promote social justice by ensuring fair compensation for workers and preventing exploitation.
Preamble: Reflects the overarching objective of the act to promote the welfare of workers and ensure a decent standard of living.
These detailed provisions outline how the Minimum Wages Act operates, including its coverage, provisions for wage calculation and
payment, enforcement mechanisms, and penalties for non-compliance.

the salient features of the Minimum Wages Act:

Minimum wage fixation:

The Act provides for the fixation and periodic revision of minimum wages by the appropriate government (either central or state) for
scheduled employments. These scheduled employments cover various sectors such as agriculture, manufacturing, construction,
domestic work, etc.
Minimum wages are typically determined based on factors like the type of work, skill level required, prevailing cost of living, and
other socio-economic considerations.
Scope of application:
The Act applies to all employees engaged in scheduled employments, whether they are employed directly by the employer or
through a contractor.
It covers workers across both organized and unorganized sectors, ensuring that no worker is deprived of fair compensation.
Coverage of workers:
The Act extends its protection to all categories of workers, including skilled, semi-skilled, and unskilled workers, as well as
apprentices and trainees.
It is designed to uplift the conditions of vulnerable workers and protect them from exploitation by ensuring they receive wag es that
meet basic living standards.
Wage components:
Minimum wages typically comprise various components such as basic wages , dearness allowance (cost of living allowance), and
other special allowances like house rent, transportation, etc.
These components may vary depending on factors like the location of employment, nature of work, and prevailing economic
conditions.
Revision of wages:
The Act mandates periodic revision of minimum wages to keep pace with changes in the cost of living, inflation rates, and economic
growth.
Revision may be conducted at regular intervals or whenever deemed necessary by the appropriate government.
Enforcement and penalties:
The Act provides for the appointment of inspectors to ensure compliance with minimum wage laws.
Employers found violating the provisions of the Act, such as paying wages below the prescribed minimum, are subject to penalt ies
which may include fines and imprisonment.
Advisory boards:
Both central and state governments establish advisory boards consisting of representatives from employers, employees, and
independent experts to advise on matters related to minimum wage fixation and implementation.
These boards play a crucial role in providing recommendations for setting fair and equitable minimum wages.
Record keeping:
Employers are required to maintain accurate records of wages, hours worked, and other relevant details for each empl oyee.
These records serve as evidence of compliance with minimum wage laws and are subject to inspection by authorized officials.
By incorporating these detailed provisions, the Minimum Wages Act aims to promote social justice, reduce wage disparities, and
improve the overall welfare of workers in the country.

Constitutionality of Minimum Wages Act, 1948

The constitutionality of the Act has been challenged on the grounds of violation of Article 14 and Article 19 of the Constitution in the
following cases:
Bijay Cotton Mills Ltd. v. State of Ajmer (1954)
In this case, there was an industrial dispute between the employers and employees of the mill regarding the enhancement of wages.
The dispute was taken to the Industrial Tribunal, which dismissed the petition of the employees, stating that the financial c apacity of
the mill precludes the enhancement of wages for the workers. An appeal was preferred before the Appellate Tribunal. Meanwhile,
the Government of Ajmer implemented the provisions of the Act and prescribed the minimum wages for industries in Ajmer. The
Appellate Tribunal remanded the case and the final award of the Industrial Tribunal was passed, wherein the basis on which the
minimum wages were fixed was rejected by the Tribunal. The minimum wages fixed by the Commissioner were challenged by
various industries on the ground that the Act itself was violative of Article 19(1)(g) of the Constitution, as the employers were unable
to carry out their businesses due to the condition of paying the minimum wages.
The Hon’ble Supreme Court of India, rejecting the contention of the employers, held that the Minimum Wages Act, 1948, is not
violative of the right to freedom of trade, as it has been implemented as a part of the Directive Principles of State Policy, specifically
under Article 43 of the Constitution. While it may be difficult for certain employers to start their business while complying with the
payment of minimum wages, the provisions of the Act have been adopted keeping the larger interests of people in mind. Thus, t he
Act was held to be constitutional.
Bhikusa Yamasa Kshatriya v. Sangamner Akola Taluka Bidi Kamgar Union (1958)
In this case, the validity of the Minimum Wages Act, 1948, was again challenged before the Hon’ble Bombay High Court. There were
various claims under Section 20 of the Act on the applicability of minimum rates of wages in certain districts of the State of
Bombay. Inter alia other contentions, the employers challenged the validity of the Act on the grounds that it was violative of Article 14
and Article 19(1)(g) of the Constitution and that the State of Bombay did not follow the requisite procedure for determining the
minimum rates of wages.
Rejecting the contentions of the employers, the Court held that the petitioners failed to establish that the requisite procedure was not
followed by the State of Bombay while determining and revising the minimum wages and that the provisions of the Act were viol ative
of Article 14 or Article 19(1)(g) of the Constitution.
N.M. Wadia Charitable Hospital & Ors. v. State of Maharashtra & Ors. (1986)
In this case, the State of Maharashtra appointed a committee to advise on the matter of the revision of the minimum wages payable
to hospital employees. However, the government did not adopt the rates of wages recommended by the committee in its report but
rather adopted a higher rate of minimum wages. The notification was challenged by the petitioners on the ground that there was no
application of mind by the government.
It was held by the Court that fixing different rates of minimum wages for different localities was permissible under the Act and did not
violate any provisions of the Constitution.
The wage structure and related matters.
Section 3: Fixation of Minimum Rates of Wages
This section empowers the appropriate government (central or state) to fix minimum rates of wages for different categories of
workers.
It specifies that minimum wages may be fixed based on time, such as hourly, daily, monthly, or any other period.
Factors considered for fixing minimum wages may include skill level, geographical location, cost of living, and nature of employment.
Section 4: Minimum Rate of Wages:This section stipulates that minimum wages must be paid to employees for the work
performed.
It defines the minimum rates of wages for different categories of workers, which may vary according to the nature of employment
and other relevant factors.
Section 5: Payment of Minimum Wages:
Employers are required to pay wages to workers not less than the minimum rates fixed under the Act.
Payment of wages must be made in cash unless authorized deductions are allowed under the law.
Section 6: Fixing Hours for Normal Working Day and Payment for Overtime Work:
This section empowers the appropriate government to fix the number of hours that constitute a normal working day.
It also mandates payment of overtime wages at a rate higher than the normal wage rate for work done beyond the normal working
hours.
Section 7: Wages Periods:
Specifies the intervals at which wages must be paid to workers, which may not exceed one month.
Employers must maintain wage registers and records in the prescribed format.
Section 8: Inspecting Authorities:
Designates inspectors appointed under the Act to inspect workplaces, examine records, and ensure compliance with the provisions
of the Act.
Inspectors have powers to enter premises, examine witnesses, and take necessary actions for enforcement.
Section 9: Claims:
Provides provisions for workers to file claims for unpaid wages or underpayment of wages.
Establishes the procedure for filing claims before the authority appointed under the Act.
Section 20: Penalties:
Imposes penalties on employers for various offenses under the Act, such as non-payment or underpayment of wages, violations of
working hour regulations, or failure to maintain records.
Penalties may include fines and imprisonment for repeat offenses.
These sections, along with other provisions of the Minimum Wages Act, collectively form the detailed framework for the wage
structure and related matters governed by the legislation
The authorities established under the Minimum Wages Act, 1948, along with relevant sections:
Appropriate Government (Section 2): The Act defines the appropriate government as the central government for industries under its
control, and state governments for all other industries. The appropriate government is responsible for fixing and revising mi nimum
wages.
Advisory Boards (Section 7): The Act empowers the appropriate government to establish advisory boards at the central and stat e
levels. These boards advise the government on matters related to minimum wages, including the fixation and revision of wages,
employment in scheduled employments, and other relevant issues.
Central Advisory Board (Section 8): The central government may establish a Central Advisory Board to advise it on the fixation and
revision of minimum wages, among other related matters.
State Advisory Boards (Section 9): Similarly, state governments may establish State Advisory Boards to advise them on matters
pertaining to minimum wages within the state.
Minimum Wages Fixation (Section 3): The appropriate government is responsible for fixing minimum wages for various scheduled
employments, either directly or through notification in the official gazette.
Wages Committees (Section 5): The appropriate government may appoint wages committees to assist in fixing and revising
minimum wages, as well as in other related matters.
Inspector-cum-Facilitator (Section 20): The appropriate government may appoint inspectors-cum-facilitators to ensure compliance
with the provisions of the Act and to facilitate its enforcement.
These authorities work together to ensure the effective implementation and enforcement of minimum wage laws, safeguarding the
interests of workers and promoting fair labor practices.
Fixation and payment of minimum wages under the Minimum Wages Act, including relevant sections:
Obligations of Employers:
Section 18: Employers are required to maintain registers and records containing prescribed particulars of employees, wages, and
other related details. These records must be preserved for a specified period.
Section 19: Inspectors appointed under the Act have the authority to examine any registers or records maintained by employers to
ensure compliance with the minimum wages provisions.
Regular Revision:
Section 5(2): The appropriate government may revise the minimum rates of wages at intervals not exceeding five years.
Section 9: Advisory boards may be constituted to advise the appropriate government on the matters relating to the fixation an d
revision of minimum wages.
Enforcement:
Section 20: Empowers inspectors appointed under the Act to enter and inspect any premises or place where employees are
employed for the purposes of examining records, registers, and other documents to ensure compliance.
Section 20: Prohibition of unauthorized deductions:
Overview: Section 20 prohibits employers from making unauthorized deductions from the wages of employees. It ensures that
workers receive their full entitled wages without any unauthorized reductions.
Case Law:
M/s. Hindustan Steel Ltd. Vs Presiding Officer, Labour Court & Ors (1973): The Supreme Court held that deductions made by the
employer, which were not authorized by the statute, contract, or custom, were illegal. This case emphasized the importance of
ensuring workers receive their full entitled wages without any unauthorized deductions.
Section 21: Maintenance of records and registers:
Overview: Section 21 mandates employers to maintain accurate records and registers related to wages, overtime, deductions, and
other particulars as prescribed by the appropriate government. It ensures transparency and accountability in wage payments and
deductions.
Case Law:
Indian Oxygen Ltd. Vs. Workmen (1975): The Supreme Court emphasized the significance of maintaining accurate records and
registers as required by Section 21. The employer was held liable for not maintaining proper records related to wages, overtime, and
deductions, which led to disputes and legal proceedings.
Penalties under the Minimum Wages Act are typically outlined in the legislation itself, which may vary by jurisdiction. Here’s a
general overview of potential penalties along with relevant sections that might be found in such legislation:
Fines: Employers found guilty of violating the Minimum Wages Act may face fines. The amount of the fine could vary depending on
the severity of the violation and may be specified within the legislation.
Imprisonment: In some cases, individuals responsible for the violation, such as employers or company officials, may face
imprisonment. This penalty is often reserved for serious or repeated offenses.
Additional Penalties: Depending on the jurisdiction, there may be additional penalties such as penalties for each day the violation
continues after conviction, or penalties for obstructing enforcement officers.
Sections: The specific sections outlining penalties can vary between different versions of the Minimum Wages Act in different
jurisdictions. For example:
In India, the penalties and sections may vary between states as each state might have its own Minimum Wages Act. However, in the
central Minimum Wages Act, Section 22 deals with penalties for offenses by employers, including fines and imprisonment for
violations.
unit 2
Object of the Act: The Act is a protective piece of legislation. It seeks to regulate the
payment of wages of certain class of workers employed in industry. The main object
of Act is to ensure to worker payment of their earned wages on due date without
unauthorised deduction. In order to ensure timely payment of wages, the Act
regulates the Tanner of payment of wages at regular intervals. It lays down
permissible deductions to protect the employed persons against arbitrary or
unauthorised deductions being made from their wages.
Scope and Coverage: The Act applies to the whole of India. The Act applies to the
payment of wages to persons employed in any factory and to person employed
(otherwise than in a factory) upon any railway by a railway administration. In the
latter case, it also applies to persons employed either directly or through a contractor
by a person fulfilling a contract with a railway administration. The State Government
may after giving three months notice extend the provisions of the Act to any class of
persons employed in any industrial establishment specified by the Central
Government and State Governments. In the case of industrial establishments owned
by the Central Government the notification can be issued with the concurrence of the
Central government. In some States the Act has been extended to shops and.
establishments also. (Section 1)
The Act does not apply to persons whose wages exceed Rs. 1600 per month. This
limit was raised from Rs. 1000 by amending the Act in 1982. The need for amending.
the Act was felt as a large number of workers previously covered by the Act got
excluded with the upward revision of pay scales and increase in dearness and other
allowances in recent years. The present limit of Rs. 1600 per months has again
become? as with the increase in lends of wages. A very large number of worers do
not get the benefit of the Act.
The Act is also applicable to persons employed in coal mines and plantations, as well
as establishments in which work relating to the construction, development or
maintenance of building, roads, bridges, supply of water, or relating to operations
connected with-navigation, irrigation or the supply of water, or relating to generation,
transmission and distribution of electricity, or other form of power is carried on
Employed Person: Employed person includes the legal representative of a deceased employed person.
2. Employer: Employer includes the legal representative of deceased employer.
3. Industrial Establishment: It means any:
Tram-way service or motor transport engaged in carrying passengers & goods or both by road for hire or reward.
Air transport service other than such service belonging to, or exclusively employed in the military, naval or Airforce of the Union, or
the Civil Aviation Department of the Government of India.
Dock, wharf, or jetty;
Inland vessel mechanically propelled;
Mine, quarry or oil field;
Plantation;
Wages: "Wages" means all remuneration (whether by way of salary, allowances, otherwise) expressed in terms of money or capabl e
of being expressed which would, if the terms of employment, expressed or implied are fulfilled, be payable to person employed in
respect of his employment or of work done in such employment.
The definition of "wages" is made sufficiently wide by including within the expression:
any remuneration payable under award or settlement between parties or order of a court;
any additional remuneration under the terms of employment (whether called a bonus or by any other name);
The expression "Wages" does not include:
1. The Bonus declared voluntarily on the basis of profits, and the bonus (whether under a Scheme of profit sharing-or otherwise)
which does not form part of the remuneration payable under the terms of employment, or which is not payable under any award or
settlement between the parties or order of a Court;
2. The value of any house accommodation, of the supply of water, light, medical attendance, or other amenity or any service
excluded from the computation of wages by a general or specific order of the State Government;
3. Any contribution paid by the employer to any pension or provident fund, and the interest accrued thereon;
Rules for payment of wages:
Under the payment of Wages Act, 1936, rules regarding the payment of wages are as
follows.
Fixation of wage-period: Every person responsible for the payment of wages under
Sec. 3 shall fix periods, known as Wages Periods in respect of which such wages
shall be payable. A wage period shall not exceed one month. (Section 4)
1. If the number of persons employed in a factory, an industrial establishment, or
railway including daily rated workers, is less than 1000, wages must be paid
before the expiry of the seventh day after the last day of the wage period.
2. In other cases, wages must be paid before the expiry of the tenth day after the
expiry of the wage period.
4. Where the employment of any person is terminated by or on behalf the
employer, the wages earned by him shall be paid before the expiry of the second
working day from the day on which employment is terminated,
7. All payment 'of wages shall be made on a working day. (Section 5
Medium of payment of wages:
All wages shall be paid in current coin or currency notes or both. The employer may
after obtaining the written' permission of the employed person pay him wages either
by cheque or by crediting the wages- in the bank account. (Section 6)
Kind of deductions
The following kinds of deductions are permitted under the Act:
1 Fines (Sec. 8): Provisions regarding fines are as follow:
a) No fine shall be imposed on any employed person except in respect of such
acts omissions on his part as the employer, with the previous approval of the State Government or of the prescribed authority, may
have been specified
by a notice.
No fine shall be imposed on an employed person until he has given an
opportunity of showing cause against the fine.
No fine shall be imposed on a person who is below the age of fifteen years
2 Deductions for Absence from Duty (Sec. 9)
Deductions may be made on account of the absence of an employed person
from duty from the place or place where, by the terms of employment, he is
required to work.
An employed person shall be deemed to be absent from duty if, though
present at the place of work, he refuses to carry out his work, in pursuance
of a stay-in strike or for any other cause which is not reasonable.
3 Deductions for Damage of Loss (Sec. 10)
A deduction for damage to or loss or goods expressly entrusted to the
employed person for custody, or for loss of money which he is required to
account can be made where such loss is directly attributable to his neglect
or default.
A deduction for damage or loss shall not exceed the amount of damage or
loss caused to the employer by his neglect or default.
4 Deductions for Accommodation and Service (Sec. 11)
Deduction for house accommodation and amenities and service supplied by the
employer can be made subject to the following conditions:
Deductions cannot be made unless such services have been accepted by the
employes person as a term of his employment.
Services do not include the supply of tools and raw materials required for
the purposed of the employment and no deduction can be made; in that
respect.
Deductions for Recovery of Advance (Sec. 12). Deductions for recovery of
advances or adjustments of over-payment of wages can be made subject to the
following conditions:
Recovery of an advance of money given before employment shall be made
from the first payment of wages in respect of complete wage period, but no
recovery can be made of such advance given for travelling expenses.
Recovery of an advance of money given after employment began shall be
subject to such conditions as the State Government may impose,
6 Deductions for Recovery of Loans (Sec. 12-A)
Deduction for recovery of loans made from any fund constituted for the
welfare of labour and the interest due in respect thereof can be made
provided the fund is constituted in accordance with the rules approved by
the State Government.
7. Deductions for Payments to Co-operative Societies and Insurance Schemes
(Sec. 13). These deductions shall include:
deductions for payments to co-operative societies approved by the State
Government-or to a scheme of insurance maintained by the Indian Post
Office; 8. Other Deductions. The following deductions are also permissible under the Act;
deductions of income-tax payable by the employed person;
deductions required to be made by order of a court
Fixation of wage period
Each individual who is liable for the payment of wages under section 3 will fix periods in regard to which such wages will be payable.
No wage period will surpass one month. That implies pay can be paid on day by day, week by week, fortnightly (for at regular
intervals) and month to month as it were. Payment of wage period for payment of wages to representatives by manager ought not to
surpass 30 days, for example, one month.
In any case, compensation can’t be paid quarterly, half-yearly or once in a year.
Time of payment of wages
Each individual employed upon or in:
Any railway, production line or modern or different foundations upon or in which the complete number of employed people is sh ort of
what one thousand, must get his wages before the expiry of the seventh day from the most recent day of the pay time frame for
which the wages are payable. Some other railway, industrial or mechanical or different foundations, must get his wage before the
expiry of the tenth day from the most recent day of the compensation time frame for which the wages are payable.
If the employer ends the work of an individual, at that point he should guarantee that the fired employee gets his wages before the
expiry of the second working day from the date of the end of employment.
The Appropriate Government can exclude to such a degree and furthermore subject to such conditions in the request the individ ual
liable for the payment of wages to utilize or employ people.
The business or the individual answerable for paying wages must guarantee that the wages are paid on a working day.
Deduction which may be made from wages
At the time of payment of the salary to personnel, the business enterprises should make deductions in step with this act simplest.
The employer should no longer make deductions as he likes. Every quantity paid by the employee to his enterprise is referred to as
deductions.
The following are not referred to as the deduction:-
Stoppage of the increment of worker
Stoppage of the promotion of the worker
Stoppage of the inducement lack of overall performance by using employee
The demotion of the worker
Suspension of the worker
The above-stated movements taken via the company have to have top and sufficient reason.