THE MINIMUM WAGES

ACT,1948
Introduction

• An Act to provide for fixing minimum rates of wages in certain

employments
• WHEREAS it is expedient to provide for fixing minimum rates of wages in
certain employments
• It came 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 & Objectives

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

health, and comfort.
2. Ensure that the labor gets fair wages.
3. To ensure that the labor lives a decent life and have a respectable name
in society.
 Definitions

• Appropriate Government Sec 2(b) means –

• (i) in relation to any scheduled employment carried on by or under the authority of the
Central Government or a railway administration or in relation to a mine, oil field or major
port, or any corporation established by a Central Act, the Central Government; and
• (ii) in relation to any other scheduled employment the State Government
• Competent Authority Sec 2 (c ) means the authority appointed by the appropriate
Government by notification in its Official Gazette to ascertain from time to time the cost
of living index number applicable to the employees employed in the scheduled
employments specified in such notification;
• Cost of Living Index Number Sec 2(d) in relation to employees in any scheduled
employment in respect of which minimum rates of wages have been fixed, means the
index number ascertained and declared by the competent authority by notification in
Official Gazette to be the cost of living index number applicable to employees in such
employment
• Employer Sec 2 (e) means any person who employs, whether directly or through another person,
or whether on behalf of himself or any other person, one or more employees in any scheduled
employment in respect of which minimum rates of wages have been fixed under this Act, and
includes, except in sub-section (3) of section 26-
• (i) in a factory where there is carried on any scheduled employment in respect of which minimum
rates of wages have been fixed under this Act, any person named under clause (f) of sub- section
(1) of section 7 of the Factories Act, 1948 (63 of 1948) as manager of the factory;
• (ii) in any scheduled employment under the control of any Government in India in respect of which
minimum rates of wages have been fixed under this Act, the person or authority appointed by such
Government for the supervision and control of employees or where no person or authority is so
appointed, the head of the Department;
• (iii) in any scheduled employment under any local authority in respect of which minimum rates of
wages have been fixed under this Act, the person appointed by such authority for the supervision
and control of employees or where no person is so appointed the Chief Executive Officer of the
local authority;
• (iv) in any other case where there is carried on any scheduled employment in respect of which
minimum rates of wages have been fixed under this Act, any person responsible to the owner for
the supervision and control of the employees or for the payment of wages
• Scheduled Employment Sec 2(g) means an employment specified in the schedule, or any
process or branch of work forming part of such employment;
• Wages Sec 2(h) means all remuneration, capable of being expressed in terms of money
which would if the terms of the contract of employment express or implied, were
fulfilled, be payable to a person employed in respect of his employment or of work done
in such employment and includes house rent allowance but does not include-
• (i) the value of –
• (a) any house-accommodation, supply of light, water, medical attendance; or
• (b) any other amenity or any service excluded by general or special order of the
appropriate Government;
• (ii) any contribution paid by the employer to any Pension Fund or Provident Fund or under
any scheme of social insurance
• (iii) Any travelling allowance or the value of any travelling concession;
• (iv) any sum paid to the person employed to defray special expenses entailed on him by
the nature of his employment; or
• (v) any gratuity payable on discharge.
• Employee Sec 2 (i) means any person who is employed for hire or reward to do any work
skilled or unskilled, manual or clerical, in a scheduled employment in respect of which
minimum rates of wages have been fixed; and includes an out worker to whom any
articles or materials are given out by another person, to be made up, cleaned, washed,
altered, ornamented, finished, repaired, adapted or otherwise processed for sale for the
purposes of the trade or business of that other person where the process is to be carried
out either in the home of the out-worker or in some other premises not being premises
under the control and management of that other person; and also includes an employee
declared to be an employee by the appropriate Government; but does not include any
member of the Armed Forces of the Union
 Minimum Wages
• (1) Any minimum rate of wages fixed or revised by the appropriate Government in respect
of scheduled employments under section 3 may consist of-
• (i) a basic rate of wages and a special allowance at a rate to be adjusted, at such
intervals and in such manner as the appropriate Government may direct, to accord as
nearly as practicable with the variation in the cost of living index number applicable to
such workers hereinafter referred to as the "cost of living allowance"; or
• (ii) a basic rate of wages with or without the cost of living allowance, and the cash value
of the concessions in respect of supplies of essential commodities at concessional rates,
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 concessions, if any.
• (2) The cost of living allowance and the cash value of the concessions in respect of
supplies of essential commodities at concessional rates shall be computed by the
competent authority at such intervals and in accordance with such directions as may be
specified or given by the appropriate Government.
 Fixation & Revision of Minimum Wages

• According to section 3 of the Minimum Wages Act 1948 “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 both the employer and employee side. Therefore, an independent person
with having no interest in the employment scheme shall be appointed as the chairman of
the wage committee. The appointment process in the Minimum Wages Act is made in this
way so that there is no scope of discrimination to the labors.
• Advisory Board
• Section 7 of the Minimum Wages Act, the Advisory Board, which proposes
recommendations and changes to be brought in labor laws. The 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. Employers 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.
Amendments

Central
Uttar Pradesh Amendment
 Irrelevant Consideration in Fixing of Minimum
Wages
• The following considerations are not relevant in fixation of wages:
a. The fact that an employer may find it difficult to carry on his business on the
basis of minimum wages
b. The financial capacity of the employer i.e his capacity to pay
c. The fact that the employer company having incurred losses during the previous
years
d. Employer’s difficulties in importing raw materials
e. The region-cum-industry priciples
 Procedure for fixing and revising minimum
wages Sec 5
• (1) In fixing minimum rates of wages in respect of any scheduled employment for the first time
under this Act or in revising minimum rates of wages so fixed, the appropriate Government shall
either-
• (a) appoint as many committees and sub-committees as it considers necessary to hold enquiries and
advise it in respect of such fixation or revision, as the case may be, or
• (b) by notification in the Official Gazette, publish its proposals for the information of persons likely
to be affected thereby and specify a date, not less than two months from the date of the
notification, on which the proposals will be taken into consideration.
• (2) After considering the advice of the committee or committees, appointed under clause (a) of sub-
section (1), or as the case may be all representations received by it before the date specified in the
notification under clause (b) of that sub-section, the appropriate Government shall, by notification
in the Official Gazette, fix, or, as the case may be, revise the minimum rates of wages in respect of
each scheduled employment, and unless such notification otherwise provides, it shall come into
force on the expiry of three months from the date of its issue:
• Provided that where the appropriate Government proposes to revise the minimum rates of wages by
the mode specified in clause (b) of sub-section (1) the appropriate Government shall consult the
Advisory Board also
• Correction of Errors Sec 10: This section allows the Appropriate Govt. to correct
an order fixing or revising minimum rates of wages if such an order contains any
clerical or arithmetical error.
• Such an order may be corrected by notification in the Official Gazette. Every such
notification shall be placed before the Advisory Board for information.
• Administrative Authority: The Minimum Wages Act is a Central Legislation;
however, its enforcement is administered by the Central Govt. shall fix the
minimum rates of wages in respect of the various scheduled employments, make
the rules, appoint Inspectors & an Authority to decide claims relating to non-
payment of minimum wages.
 Advisory Board & Central Advisory Board
• Section 7: Advisory Board For the purpose of coordinating the work of committees
and sub committees appointed under section 5 and advising the appropriate
Government generally in the matter of fixing and revising minimum rates of wages,
the appropriate Government shall appoint an Advisory Board.
• Section 8: Central Advisory Board
• (1) For the purpose of advising the Central and State Governments in the matters of
the 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 a Central Advisory Board.
• (2) The Central Advisory Board shall consist of persons to be nominated by the
Central Government representing employers and employees in the scheduled
employments, who shall be equal in number, and independent persons not
exceeding one-third of its total number of members; one of such independent
persons shall be appointed the Chairman of the Board by the Central Government.
• Section 9: Composition of committees, etc. Each of the committees, sub-
committees and the Advisory Board shall consist of persons to be nominated by the
appropriate Government representing employers and employees in the scheduled
employments, who shall be equal in number, and independent persons not
exceeding one-third of its total number of members; one of such independent
persons shall be appointed the Chairman by the appropriate Government.
• Power of the Central Government to make rules Sec 29:
• The Central Government may, subject to the conditions of previous publication, by
notification in the Official Gazette, make rules prescribing the terms of office of
the members, the procedure to be followed in the conduct of business, the method
of voting, the manner of filling up casual vacancies in membership and the quorum
necessary for the transaction of business of the Central Advisory Board.
 Wages in kind Sec 11

• (1) Minimum wages payable under the Act shall be paid in cash.
• (2) 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.
• (3) If the appropriate Government is of the opinion that provisions should be made
for the supply of essential commodities at concessional rates, the appropriate
Government may, by notification in the Official Gazette, authorize the provision of
such supplies at concessional rates.
• (4) The cash value of wages in kind and of concessions in respect of supplies of
essential commodities at concessional rates authorized under sub-sections (2) and
(3) shall be estimated in the prescribed manner.
 Payment of minimum rates of wages Sec 12

• (1) Where in respect of any scheduled employment a notification under section 5 is

in force, the employer shall pay to every employee engaged in a scheduled
employment under him, wages at a rate not less than the minimum rates of wages
fixed by such notification for that class of employees in that employment without
any deductions except as may be authorized within such time and subject to such
conditions as may be prescribed.
• (2) Nothing contained in this section shall affect the provisions of the Payment of
Wages Act, 1936 (IV of 1936)
 Fixing hours for a normal working day, etc
Sec 13
• (1) 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.
• (2) The provisions of sub-section (1) shall, in relation to the following classes of employees, apply
only to such extent and subject to such conditions as may be prescribed:-
• (a) employees engaged on urgent work or in any emergency which could not have been foreseen or
prevented;
• (b) employees engaged in work in the nature of preparatory or complementary work which must
necessarily be carried on outside the limits laid down for the general working in the employment
concerned;
• (c) employees whose employment is essentially intermittent;
• (d) employees engaged in any work which for technical reasons has to be completed before the duty
is over;
• (e) employees engaged in a work which could not be carried on except at times dependent on the
irregular action of natural forces.
• (3) For the purposes of Clause (c) of sub-section (2), employment of an employee is essentially
intermittent when it is declared to be so by the appropriate Government on the ground that the
daily hours of duty of the employee, or if there be no daily hours of duty as such for the employee,
the hours of duty, normally include periods of inaction during which the employee may be on duty
but is not called upon to display either physical activity or sustained attention.
 Overtime Sec 14

• (1) Where an employee, whose minimum rates of wages is fixed under this Act by
the hour, by the day or by such a longer wage-period as may be prescribed, works
on any day in excess of the number of hours constituting a normal working day,
the employer shall pay him for every hour or for part of an hour so worked in
excess 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.
• (2) Nothing in this Act shall prejudice the operation of the provisions of section 59
of the Factories Act, 1948 (63 of 1948), in any case where those provisions are
applicable
 Wages of worker who works for less than
normal working day Sec 15
• If an employee whose minimum rates of wages has been fixed under this Act by the
day, works on any day on which he was employed for a period less than the
requisite number of hours constituting a normal working day, he shall, save as
otherwise hereinafter provided, be entitled to receive wages in respect of work
done by him on that day as if he had worked for a full normal working day:
• Provided, however, that he shall not be entitled to receive wages for a full normal
working day,-
• (i) in any case where his failure to work is caused by his unwillingness to work and
not by the omission of the employer to provide him with work, and
• (ii) in such other cases and circumstances as may be prescribed
 Wages for two or more classes of work Sec 16

• Where an employee does two or more classes of work to each of which a different
minimum rate of wages is applicable, the employer shall pay to such employee in
respect of the time respectively occupied in each such class of work, wages at not
less than the minimum rate in force in respect of each such class.
• Minimum time rate wages for piece-work Sec 17- Where an employee employed
on piece-work for which minimum time rate and not minimum piece rate has been
fixed under this Act, the employer shall pay to such employee wages at not less
than the minimum time rate.
 Maintenance of registers and records Sec 18
• (1) Every employer shall maintain such registers and records giving such particulars
of employees employed by him, the work performed by them, the wages paid to
them, the receipts given by them and such other particulars and in such forms as
may be prescribed.
• (2) Every employer shall keep exhibited, in such manner, as may be prescribed in
the factory, workshop or place where the employees in the scheduled employment
may be employed, or in the case of out-workers, in such factory, workshop or
place as may be used for giving out work to them, notices in the prescribed form
containing prescribed particulars.
• (3) The appropriate Government may, by rules made under this Act, provide for
the issue of wage books or wage slips to employees employed in any scheduled
employment in respect of which minimum rates of wages have been fixed and
prescribe the manner in which entries shall be made and authenticated in such
wage books or wage slips by the employer or his agent.
 Enforcement of the Act
• Inspector Sec 19
• This section empowers the Appropriate Govt. to appoint inspectors for the purposes of the Act by
means of a notification in the Official Gazette. It shall define the local limits within which they
shall exercise their functions.
• The powers of the inspectors are as follows:
1. To enter the premises at reasonable hours with or without assistants for the purpose of examining
such registers & records of wages or notices required to be kept under the act.
2. To examine the persons found in such premises whom he believes to be employees
3. To require any person responsible for giving out-work & out-workers to give any information
4. To seize, to take copies of such register, record of wages or notices considered relevant in respect
of an offence believed to have been committed by an employer
5. To exercise such other powers as may be prescribed
• Every inspector shall be deemed to be a public servant within the meaning of the IPC.
 Claim Sec 20

• The purpose is to ensure that the employer makes the payments to the employees
at the minimum rates specified in the Act. The employees have been given the
right to invoke the aid of authority appointed under this section in case any
attempt is made to pay them at lower rates.
• The App. Govt. may appoint by notification in the Official Gazette, an authority to
hear & decide for any given area the claims relating to-
1. Payment of less than the minimum rate of wages
2. Payment of remuneration for work done on days of rest
3. Payment for overtime wages
• Is primarily concerned with the fixation of rates of wages. The Act is not really
intended for enforcement of payment of wages for which provisions is made in
other statutes.
 Appointment of Authority

• The following may be appointed as an authority to hear & decide the claims:
1. Any Commissioner for workmen compensation
2. Any officer of the Central Govt. exercising functions as a Labour Commissioner
for any region
3. Any officer of the State Govt. not below the rank of a Labour Commissioner
4. Any officer with experience as a judge of a Civil Court
5. Any stipendiary Magistrate
 Application for Claims

• Where an employee has any claim of the nature referred to above the following
may present an application to the Authority for hearing & deciding the claims:
1. The employee himself
2. Any legal practitioner
3. Any official of a registered trade union authorized in the behalf
4. Any inspector
5. Any person acting with the permission of the Authority
• The application for such claims shall be presented within a period of 6 months
from the date on which the minimum wages or other amount became payable.
 Procedure for Deciding Claims

• When an application under this section is entertained, the Authority shall hear
both the parties, & after such further inquiry, as may be necessary, may direct the
employer to pay-
• The amount by which the minimum wages payable to the employee exceed the
amount actually paid to him, together with the amount of compensation which
cannot exceed 10 times the amount of such excess
• In any other case, the payment of the amount due to the employee together with
the amount of compensation not exceeding ₹ 10.
Recovery of Amount

• Any amount payable under this section may be recovered:

a. If the Authority is a Magistrate, by Authority himself
b. If the Authority is not a Magistrate, by any Magistrate to whom
the authority makes application in this behalf
Powers of Authorities

• Every Authority appointed under this section shall have all the
powers of a Civil Court under C.P.C 1908, for purpose of:
a. Taking evidence
b. Enforcing the attendance of witnesses
c. Compelling the production of documents
 Single application in respect of a number of
employees Sec 21
• (1) Subject to such rules as may be prescribed, a single application may be
presented under section 20 on behalf or in respect of any number of employees
employed in the scheduled employment in respect of which minimum rates of
wages have been fixed and in such cases the maximum compensation which may
be awarded under sub-section (3) of section 20 shall not exceed ten times the
aggregate amount of such excess, or ten rupees per head as the case may be.
• (2) The Authority may deal with any number of separate pending applications
presented under section 20 in respect of employees in the scheduled employments
in respect of which minimum rates of wages have been fixed, as a single
application presented under sub-section (1) of this section and the provisions of
that sub- section shall apply accordingly
 Offences & Penalties

Offences Penalties

Payment of wages at less than the minimum rates Imprisonment upto 6 months or fine upto ₹500 or both
fixed or amounts due under this act

Contravention of any rule or order made u/s 13 in Imprisonment upto 6 months or fine upto ₹500 or both
respect of normal working hours

Contravention of any other provision of the Act or any Fine upto ₹500
rule or order made thereunder

Where a claim made u/s 20 by an employee is found to Fine upto ₹50 (payable to the employer)
be malicious or vexatious
 Exemption of employer from liability in
certain cases Sec 23
• Where an employer is charged with an offence against this Act, he shall be
entitled, upon complaint duly made by him, to have any other person whom he
charges as the actual offender, brought before the Court at the time appointed for
hearing the charge; and if, after the commission of the offence has been proved,
the employer proves to the satisfaction of the Court-
• (a) that he has used due diligence to enforce the execution of this act, and
• (b) that the said other person committed the offence in question without his
knowledge, consent or connivance, that other person shall be convicted of the
offence and shall be liable to the like punishment as if he were the employer and
the employer shall be discharged:
• Provided that in seeking to prove, as aforesaid, the employer may be examined on
oath, and the evidence of the employer or his witness, if any, shall be subject to
cross examination by or on behalf of the person whom the employer charges as the
actual offender and by the prosecution.
 Bar of suits Sec 24

• No Court shall entertain any suit for the recovery of wages in so far as the sum so
claimed-
• (a) forms the subject of an application under section 20 which has been presented
by or on behalf of the plaintiff, or
• (b) has formed the subject of a direction under that section in favour of the
plaintiff, or
• (c) has been adjudged in any proceeding under that section not to be due to the
plaintiff, or
• (d) could have been recovered by an application under that section
 Contracting out Sec 25

• Any contract or agreement, whether made before or after the commencement of

this Act, whereby an employee either relinquishes or reduces his right to a
minimum rate of wages or any privilege or concession accruing to him under this
Act shall be null and void in so far as it purports to reduce the minimum rate of
wages fixed under this Act
 Exemptions and Exceptions Sec 26
• (1) The appropriate Government may, subject to such conditions if any as it may think fit to impose,
direct that the provisions of this Act shall not apply in relation to the wages payable to disabled
employees.
• (2) The appropriate Government may, if for special reasons it thinks so fit, by notification in the Official
Gazette, direct that subject to such conditions and for such period as it may specify the provisions of this
Act or any of them shall not apply to all or any class of employees employed in any scheduled
employment or to any locality where there is carried on a scheduled employment.
• (2-A) The appropriate Government may, if it is of opinion that, having regard to the terms and conditions
of service applicable to any class of employees in a scheduled employment generally or in a 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 or in
respect of employees in such establishment or part of any establishment as are in receipt of wages
exceeding such limit as may be prescribed in this behalf, direct by notification in the Official Gazette
and subject to such conditions, if any, as it may think fit to impose, that the provisions of this Act or any
of them shall not apply in relation to such employees:
• (3) Nothing in this Act shall apply, to the wages payable by an employer to a member of his family who is
living with him and is dependent on him.
• Explanation - In this sub-section a member of the employer's family shall be deemed to include his or her
spouse or child or parent or brother or sister.