MINIUM

WAGES ACT
1948
Submitted by Diya Miraj
INTRODUCTION

• The purpose of minimum wage is to protect the workers from

unduly low pay. It enables them to earn adequate wages for the
work done by them and to maintain a minimum living standard.
It also acts as a tool to eradicate poverty and to remove
discrimination between men and women. 
• In India, a complex method of setting a minimum wage is used which defines
nearly 2,000 different types of jobs for unskilled workers and over 400 categories
of employment which provides a minimum daily wage for each type of job.
Need for Minimum Wages Act, 1948

• The Minimum Wages Act, 1948 was enacted by the Indian Legislature to deal with matters relating to
providing the minimum wage to the workers so that they can afford their basic needs and maintain a decent
standard of livelihood. The Act further ensures a secure and adequate living wage for all labourers and it also
guarantees that an employee earns enough to provide for his family. The Act authorises both Central and state
governments in fixing the rate of minimum wage. The Minimum Wages Act, 1948 has also laid down a
provision for revision of minimum wages in order to cope with the changing prices of basic commodities.

• The Act seeks to provide better protection of the rights of the employees by establishing advisory boards to
resolve any dispute between the employer and employee regarding the payment of minimum wage to the
employees.
Objectives of Minimum Wages Act
1. To fix the minimum rates of wages that are to be provided to the employees and revise such rates of wages
every five years.
2. To secure an adequate living wage for all the labourers in the interest of the public.
3. To fix the daily working hours of the employees.
4. To prevent exploitation of the workers by the employers.
5. To ensure that the labourers can maintain a decent standard of living.
6. To provide basic physical needs, good health and a level of comfort to the employees.
7. To penalise the employers when they fail to provide minimum wages to the workers.
8. To establish advisory boards to regulate and administer the provisions of the Act.
9. To lay down the powers and duties of the inspectors for the purposes of this Act.
10. To prevent any employer from wrongfully infringing the right of any employees.
11. To establish appropriate authorities where the employees can seek redressal when the employer has failed
to pay the daily wage.
12. To authorise the Central and state governments to make rules and regulations for the purposes of this Act.
 Essential provisions under Minimum
Wages Act
1. Section 3: the minimum wages payable to the employees are to be fixed by the appropriate government.
However, this Section also mentions that the rate of wages shall be revised every five years. The appropriate
government may fix:

• The minimum rate of wages for time work,

• the minimum rate of wage for piece work,
• a minimum rate of remuneration to apply in the case of employees employed on piece work for the purpose of securing to such
employees a minimum rate of wages on a time work basis,
• a minimum rate of wage to substitute the for the minimum rate which would otherwise be applicable, in respect of overtime
work done by employees.
• In fixing or revising minimum wages under Section 3 of the Act:

• Different minimum rates of wages may be fixed for; different classes of work, different scheduled employment, different
localities, different age groups, etc.
• Minimum wages may be fixed by the wage period such as; by the hour, by the day, etc.
Section 4: states that the minimum wages fixed by the appropriate government must consist of:

• A basic rate of wages and a special allowance must be adjusted at necessary intervals by the appropriate government to
match the cost of living of the employees.
• The cost of living allowance and the cash value of the concessions in respect of supplies of essential commodities must
be computed by a competent authority.
Section 5: states that in order to fix or revise the minimum wage of the employees the appropriate
government may establish as many committees and subcommittees necessary to hold enquiries in
matters regarding fixing and revision of minimum wage. Further, the appropriate government by
notification to the Official Gazette publish its proposal for the information of the individuals who are
likely to be affected by such information and thereby specify the date which must not be less than two
months from the date of notification of the proposals that will be taken into consideration.
Under Section 7 the appropriate government must appoint advisory boards for coordinating the work
of the committees and subcommittees mentioned in Section 5 and also for advising the appropriate
government generally in the matter of fixing and revising minimum rates of wages.
Section 9 of the Act states that the members of committees, sub-committees, and Advisory
Boards shall be appointed by the appropriate government. Individuals who are appointed to
these committees shall be representatives of employers and employees in scheduled
employments and shall be equal in number. The appropriate government shall appoint such an
independent person to be the Chairman of the committee.
Section 11 of the Minimum wages Act, 1948 mentions how the wages will be payable to the
employees.

• Minimum wages under this Act shall be paid in cash.

• The appropriate government under necessary circumstances by notification to the Official Gazette
authorise the payment of the minimum wages either wholly or partly in kind.
• The appropriate government by notification to the Official Gazette authorised a provision for the supply
of essential commodities at concession rates.
• The cash value of wages and the concession rates shall be authorised in the prescribed manner stated
under the Act.
• The payment of wages to the employees under this Act should be done in accordance with Section 12 of
the Act, which states that the employer shall pay the minimum rate of wages fixed to every employee
working under him within such time and manner prescribed under the Act.
Section 13 specifies that the appropriate government may:

• Fix the working hours of a normal day including one or more specified intervals.
• Provide a day of rest in every period of seven days to all the employees or a class of employees, and
adequate remuneration must be provided to the employees during the day of rest.
• Provide payment to the employees on the day rest which shall not be less than the overtime rate.
• When an employee works more than the specified number of hours constituting a normal working day,
the employer shall be liable to pay him for every hour or part of the hour at the overtime rate fixed under
this Act or under any law of the appropriate government for the time being in force.

Furthermore, under Section 15 if an employee has worked less than the required number of hours
constituting a normal working day they shall be entitled to receive wages in accordance with work done
by him on that day as if he has worked a full day. However, he might not receive the wages of a full day
under certain circumstances.
Under Section 18 of the Minimum Wages Act, 1948 every employer will be liable to maintain registers
and records relating to the number of employees employed under him, the work done by them, the wages
paid to them, the work performed by them, maintain the receipts given by the employers and any other
relevant information.
The appropriate government may by notification to the Official Gazette appoint any
Commissioner for Workmen’s Compensation or any officer of the Central Government exercising
functions as a Labour Commissioner for any region, with an experience as a judge to hear and
decide cases in a particular region about matters relating to non-payment or payment of less than
the minimum wages to the employees.

When an application under Section 20 of the Minimum Wages Act, 1948 is made to the authority,
the authority shall give adequate opportunities of being heard to both the applicant and the
employer. Under this Section, every direction of the authority shall be binding and final. The
authority appointed under the Act shall have the powers of a civil court under the Code of Civil
Procedure, 1908 for the purposes of taking evidence, enforcing the attendance of witnesses,
production of documents, etc.

Section 22 of the Minimum Wages Act, 1948 an employer who fails to provide minimum rates of
wages to the employees or contravenes any rule or order made under Section 13 of the Act shall
be punished with imprisonment for a term which may extend to six months or fine not less than
five hundred rupees or both.
Constitutional validity of Minimum
Wages Act

• The constitutional validity of this Act was challenged before the court
in various cases. However, the judiciary played a critical role in
determining that the Act was constitutionally valid and it protects the
interests of the workers so that they have access to food, shelter,
clothing, education, medical assistance, etc. The judiciary also stated
that failure to pay below the minimum wage rate amounts to forced
labour.
Not violative of Article 19 of the
Constitution
• The constitutional validity of the Minimum Wages Act, 1948 was first challenged in the case, Bijay Cotton
Mills Ltd. v. The State of Ajmer, 1954. In this case, there was an industrial question between the industry
and the workers regarding the improvement of wages. The company alleged before the court that the
provisions of the Act are illegal since it puts unreasonable restrictions on the employer as he is deterred
from resuming his trade or business unless he is ready to pay the minimum wages to the workers. The
rights of the employees are also limited, as they are disabled from working in any trade or industry unless
the terms are agreed to between them and their employers. Therefore, the Act is violative of Article 19(1)
(g) of the Indian Constitution which guarantees freedom of trade and business. However, the Supreme
Court of India held that the provisions of the Act are not unreasonable and permissible under Article 19 of
the Indian Constitution, moreover, the provisions of the Act have been imposed for the benefit of the
general public as the Directive Principles of State Policy embodied under Article 43 of the Constitution.
• Similarly, in the case Bhikusa Yamasa Kshatriya v. Sangamner Akola
Bidi Kamgar Union, 1958, the Bombay High Court held that the
constitution of the committees and the Advisory Boards under the
Minimum Wages Act, 1948 did not contravene the statutory provisions of
the prescribed legislature and further on careful examination of the Act it
was noticed that Section 3(3)(iv) of the Act does not contravene Article
19(1) of the Indian Constitution neither does it violate equal prot
Not violative of Article 14 of the
Constitution

• Furthermore, the Act is not violative of Article 14 of the Constitution which states equality
before the law. It was brought into light by India’s Union Labour and Employment Minister
Shri Mallikarjuna Kharage that the variation of minimum wages of workers in different states
is due to the different socio-economic conditions, prices of commodities, paying capacity,
productivity, etc. which impacts the wage rate paid to the workers in a particular state. In the
case, N.M. Wadia Charitable Hospital v. State of Maharashtra, 1986, it was held by the
Bombay High Court that fixing different rates of minimum wages for different localities is
permitted under the Constitution and the labour laws of the country, thus fixing different rates
of minimum wages for different areas is not discriminatory and not violative of the
Constitution.