Minimum Wages Act envisages to fix minimum standard wage in scheduled employments thereby protecting the interest of the wage earners. The Act aims to eradicate the exploitation of labour at the hands of the respective employers. The Act also provides provision for maximum daily working hours, periodic rest day and also overtime wages. It lays out provision to protect the interest of the employees and provide them with minimum wage deemed ideal to sustain themselves and their dependents.
Coverage and Applicability
Minimum Wages Act extends to whole of India and is applicable to all the establishments employing one or more Individuals included under the Scheduled Employment list.
Every Employee working in any scheduled employment is covered under the Act.
Minimum Wages Act is governed by the laws laid out by the Central Government. However, it is administered by both the Central as well as the State Governments respectively. The State Government is free to fix minimum wage rate as per scheduled employments, make provisions, appoint inspectors and authorized to take action relating to violation of the Act.
Government has also appointed Advisory Boards and Committees to investigate and advise the accordingly with regard to fixation/revision of wages. The Board comprises of members appointed by the Government, along with equal representation from Employers and Employees as per the Employment Schedule.
“Wages” means all remuneration expressed in monetary terms payable to an employee inclusive of House Rent Allowance (HRA) but excludes value of accommodation, supply of basic amenities, medical care, contribution to provident/pension fund, travel expenses, reimbursement of any other specified expense and gratuity.
Minimum Wage Rate Fixation
State Government is empowered to fix minimum wage rates or wages for different classes of employees employed under any Scheduled Employment. They are also required to review and revise the same from time to time with the stipulation that interval between revision should not exceed 5 years. Wage fixation should be done in consideration of price index and dearness allowance.
Stipulation of Working Hours
Government may also fix number of working hours in respect of minimum wages fixed. This includes:-
Fix number of working hours constituting a normal working day, inclusive of one or more intervals.
Ensure a rest day is provided along with full normal day wage on a weekly basis to the employee.
Payment of Overtime Wages
Employees working beyond the normal working hours are entitled to overtime wages for every hour worked in excess as per the rates prescribed under this Act or any other law, whichever is higher.
Factories Act has provision to pay overtime wages twice the normal wage rates.
Mode of Payment
Payment of wages should be in monetary terms unless specified by the Government.
Obligation of Employers
Employer/Establishment is bound to pay to each and every employee employed by them, wages at a rate not less than minimum rate prescribed for the particular class of employee as per the Act, without any deduction apart from the ones prescribed under Payment of Wages Act.
Return, Registers and Records
The employer is required to maintain prescribed registers and records providing detail records of employees employed, wages paid, and duties performed by them.
Pay slips should also be provided to the employees.
Annual Return with respect to same should be filed by the Employer in the succeeding year.
Offences and Penalties
Any contravention of the law would attract penalties in form of fines or imprisonment depending on the level of offence.
Employees are also entitled to file claims to the competent authority under the Act, in cases where their rights have been violated. If found guilty Employer will be required to pay difference in wages (less amount paid) along with compensation to the employee.
The Schedule (List not Exhaustive)
Employments in Mills, Godowns, Manufacturing Sector, Mines.
Employment under Local Authority
Employment in Dock and Ports
I will try to provide the Minimum Wage Rates in my next post.