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WAGES

The document discusses the Minimum Wages Act of 1948 in India. It defines wage and outlines the objectives of the act, which are to provide a living wage and prevent worker exploitation. It also discusses factors considered in determining a sound wage policy, including demand/supply of labor, productivity, and cost of living.

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sandhya lakshman
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36 views

WAGES

The document discusses the Minimum Wages Act of 1948 in India. It defines wage and outlines the objectives of the act, which are to provide a living wage and prevent worker exploitation. It also discusses factors considered in determining a sound wage policy, including demand/supply of labor, productivity, and cost of living.

Uploaded by

sandhya lakshman
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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MINIMUM WAGES ACT, 1948

WAGE – Section 2(h)

All renumeration 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:

 the value of any house-accommodation, supply of light, water, medical


attendance, or
 any other amenity special order of the appropriate Government
 any contribution paid by the employer to any Pension Fund or
Provident Fund
 any travelling allowance
 special expenses
 any gratuity payable on discharge

OBJECTIVES OF THE ACT

The main objective behind minimum wages of the workers should be


primarily because of two reasons:

1. Social objective: Minimum wage is essential for abolishing poverty by


providing a basic standard of living to the employees.
2. Economic objective: The rate of minimum wage should be fixed in
such a way that would motivate the workers to put in maximum
efforts at their jobs and thus improve the economy of the country and
their standard of living.
 To fix the minimum rates of wages and revise wages every five years. 
 To secure an adequate living wage for all the labourers.
 To fix the daily working hours of the employees.
 To prevent exploitation of the workers by the employers. 
 To ensure that the labourers can maintain a decent standard of living.
 To provide basic physical needs, good health to the employees.
 To penalise the employers when they fail to provide minimum wages
to the workers.
 To prevent any employer from infringing the right of any employees.

WAGE POLICY

The term wage policy refers to legislation or government action


undertaken to regulate the level or structure of wage, or both, for the
purpose of achieving specific objectives of social and economic policy. It
involves all systematic efforts of the government in relation to a national
wage and salary system, legislations, and so on to regulate the levels or
structures of wages and salaries with a view to achieving economic and
social objectives of the government.

OBJECTIVES OF WAGE POLICY

 Establish good labour relations

 Decide on appropriate wages

 Decide wages based on the individual’s capability

 Develop a pre-determined scheme for payment of wages

 Guarantee minimum wages

IMPORTANT FACTORS TO BE TAKEN INTO ACCOUNT WHILE


DETERMINING A SOUND WAGE POLICY
 Demand for and supply of labour
 Prevailing wage rates
 Ability to pay
 Productivity
 Cost of living
 State regulation
 Job requirements
 Trade unions
Demand and Supply - If the supply of labour is abundant, workers will be
ready to work for lower wages. But if the supply of labour is scarce, workers
will demand higher wages.
Prevailing Wage Rates - Wages paid by one firm generally depend upon the
wages paid by other competing firms or by other firms in the same locality
or by the industry as a whole for the same type of work.
Ability to Pay - The wage level of the organisation largely depends upon the
ability of the firm to pay to its workers. The ability to pay, in its turn,
depends upon the amount of profits earned by the organisation. Therefore,
wages will be generally raised as the firm’s net profitability increases.
Productivity - It is argued that wages should be commensurate with the
productivity of the workers. Therefore, the higher the productivity, the
higher will be the wage level to be paid to the workers.
Cost of Living - Wages should depend upon the cost of living. Changes in
cost of living therefore lead to changes in the wage-rates. It is therefore
desirable to increase wage-levels whenever the cost of living rises.
State Regulation - Since workers bargaining power is weak, the State steps
in to protect their interest by regulating their wage-rates. The State by
enacting necessary legislation, guarantees minimum or fair wages to
workers so as to enable them to lead a decent standard of living.
Job Requirements - Jobs differ in their responsibility and authority.
Generally jobs requiring higher authority and responsibility are paid higher
wages. Similarly, jobs which require highly skilled workers are also highly
paid. Again jobs which are very risky and dangerous are also highly paid.
Trade Unions - Workers who are well organised into trade unions are able
to get higher wage-rates whereas those who have not formed such unions
are not able to get higher wage rates.

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