MINIMUM WAGES

Under Minimum Wages Act and Wages Code

2019
Minimum Wages - Perspectives
 As livelihood and therefore Human Rights
 This perspective however does not look at

MW as cost of production of goods or

services or delivery of government services
and budgets and revenues to match it.
 Thus huge variation between states and

between urban and rural areas. Data from ILO

2018 report on wages in India follows in next
two slides .
Towards a NATIONAL MINIMUM
WAGE- as per Expert Committee
 FOOD
 NON FOOD – ESSENTIAL (clothing, fuel and

light, house rent, education, medical

expenses, footwear, and transport (or
conveyance)
- ALL other (as recreation,
festivals/ceremonies and provision for
marriage expenditure)
 @
2400
calori
e

To be
noted
As per draft rules issued by GOI
3. Manner of calculating the minimum rate of wages. –
(1) For the purposes of sub-section (5) of section 6, the minimum rate of
wages shall be fixed on the day basis keeping in view the following
criteria*, namely:-
(i) the standard working class family which includes a spouse and two
children apart from the earning worker; an equivalent of three adult
consumption units;
(ii) a net intake of 2700 calories per day per consumption unit;
(iii) 66 meters cloth per year per standard working class family;
(iv) housing rent expenditure to constitute 10 per cent. of food and
clothing expenditure;
(v) fuel, electricity and other miscellaneous items of expenditure to
constitute 20 percent of minimum wage; and
(vi) expenditure for children education, medical requirement, recreation
and expenditure on contingencies to constitute 25 percent of minimum
wages;
Applicability
Minimum Wages Act 1948 Wages Code 2019
"employer" means any person who 5. No employer shall pay to any
employs, whether directly or employee wages less than the
through another person, or minimum rate of wages notified by
whether on behalf of himself or the appropriate Government.
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,

"scheduled employment" means an

employment specified in the
Schedule, or any process or branch
Role of Central Government in fixing Floor
Wages
Minimum Wages Act Wages Code 2019
The appropriate government fixes 9. (1) The Central Government
the MW. In case it is state shall fix floor wage taking into
government then State account minimum living standards
Government fixes MW. If of a worker in such manner as may
Appropriate Government is Central be prescribed: Provided that
Government the Central
(2) The minimum different
rates of wages fixed by the floor
appropriate wage may
Government be fixed
under
section 6 shall
Government fixesnotthe
be less
MW. than the floor wage and if the minimum
for different rates of wages
geographical areas.
fixed by the appropriate Government earlier is more than the floor wage, then,
the appropriate Government shall not reduce such minimum rates of wages fixed
by it earlier.
(3) The Central Government may, before fixing the floor wage under sub-section
(1), obtain the advice of the Central Advisory Board constituted under sub-section
(1) of section 42 and consult State Governments in such manner as may be
prescribed.
Floor Wages – How to be determined
11. Manner of fixing floor wage.—(1) The Board shall be consulted by the
Central Government for the purposes of fixation of basic rate of floor
wage under sub-section (1) of section 9 taking into account minimum Centr
living standards taking into account an equivalent of three adult al
consumption units including worker of the family comprising of food,
clothing, housing and any other factors considered appropriate by the
Central Government from time to time.
(2) The advice of the Board obtained in consultation under sub-rule (1) shall be circulated
by the Central Government to all State Governments for consultation with them.
(3) The advice of the Board referred to in sub-rule (2) and the views of the State
Governments received in consultation referred to in that sub-rule shall be considered
before fixing the floor wage under sub-rule (1).
(4) The Central Government may revise the basic rate of floor wage fixed under sub-rule (1)
ordinarily at an interval not exceeding five years and undertake adjustment for variations
in the cost of living periodically in consultation with the Board.
12. Manner of consultation with State Governments.— The Central Government shall obtain
the advice of the Board and consult such State Governments as it think necessary before
fixing the floor wage under rule 11.
Worker definition- out worker excluded in
Wages Code
Minimum Wages Act
(i) "employee" 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
What happens to
Government; but does not include any member of
“out worker “
the Armed Forces of the  [Union].
7
Code on Wages 2019
(z) "worker" means any person (except an apprentice
as defined under clause (aa) of section 2 of the
Apprentices Act, 1961) employed in any industry to
do any manual, unskilled, skilled, technical,
operational, clerical or supervisory work for hire or
reward, whether the terms of employment be
express or implied, and includes—
(k) "employee" means, any person (other than an
apprentice engaged under the Apprentices Act,
1961), employed on wages by an establishment to
do any skilled, semi-skilled or unskilled, manual,
operational, supervisory, managerial, administrative,
technical or clerical work for hire or reward, whether
the terms of employment be express or implied, and
also includes a person declared to be an employee
by the appropriate Government, but does not
include any member of the Armed Forces of the
Union;
(g) "contract labour" means a worker who shall be
deemed to be employed in or in connection with the
work of an establishment when he is hired in or in
SKILLS DEFINED IN DRAFT RULES
 “highly skilled occupation” means an occupation which calls in its performance a
specific level of perfection and required competence acquired through intensive
technical or professional training or practical occupational experience for a
considerable period and also requires of an employee to assume full
responsibility for his judgement or decision involved in the execution of such
occupation;
 “skilled occupation” means an occupation which involves skill and competence
in its performance through experience on the job or through training as an
apprentice in a technical or vocational institute and the performance of which
calls for initiating and judgement;
 “semi-skilled occupation” means an occupation which in its performance
requires the application of skill gained by the experience on job which is capable
of being applied under the supervision or guidance of a skilled employee and
includes supervision over the unskilled occupation;
 “unskilled occupation” means an occupation which in its performance requires
the application of simply the operating experience and involves no further skills;
Differences in SKILL LEVELS
Operati Skill gained with Skill and competence specific level of
ng experience + under acquired through perfection and required
experie supervision of experience or training competence acquired
nce Skilled Employee + as apprentice acquired through intensive
only Can supervise in a Vocational Institute technical or
unskilled operation + calls for initiating and professional training or
judgement practical occupational
experience for a
considerable period
and also requires of an
employee to assume
full responsibility for
his judgement or
decision
UNSKIL Semi Skilled SKILLED HIGHLY SKILLED
LED
4. Norms for fixation of minimum
rate of wages
.- (1) While fixing the minimum rate of wages under section 6, the Central Government shall divide the concern
metropolitan area, non-
geographical area into three categories, that is to say the

metropolitan area and the rural area.

(2)
The Central Government shall constitute a technical committee under clause (a)
of sub-section (1) of section 8 for the purpose of advising the Central
Government in respect of skill categorization , which shall consist of the following members,
namely:-
(i) Chief Labour Commissioner (Central)………………… Chairperson;
(ii) Joint Secretary to the Government of India dealing with the wages …………… member;
(iii) a representative from the Government of India, Ministry dealing with skill development;
(iv) Director General of employment, Government of India, Ministry of Labour and Employment………………. member;
(v) two technical experts in wage determination as nominated by Central Government ……………………member; and
(vi) the Deputy Secretary to the Government of India, Member Secretary of such technical committee.

(3) The Central Government shall, on the advice of the technical committee referred to in sub-rule (2), categorize the
unskilled, semi-skilled, skilled and
occupations of the employees into four categories that is to say
highly skilled by modifying, deleting or adding any entry in the categorization of
such occupation specified in Schedule E.
(4) The technical committee referred in sub-rule (2) shall while advising the Central Government under sub-rule (3) take
into account, to the possible extent, the national classification of occupation or national skills qualification frame work
or other similar frame work for the time being formulated to identify occupations.
Central Govt to categorize skills
while appropriate govt to fix
minimum wages
8. (1) In fixing minimum rates of wages for the first time or in revising minimum rates of wages under
this Code, the appropriate Government shall either—
(a) appoint as many committees as it considers necessary to hold enquiries and recommend in respect
of such fixation or revision, as the case may be; or
(b) by notification 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 shall
be taken into consideration.
(2) Every committee appointed by the appropriate Government under clause (a) of sub-section (1) shall
consist of persons––
(a) representing employers; (b) representing employees which shall be equal in number of the members
specified in clause (a); and (c) independent persons, not exceeding one-third of the total members of
the committee.
(3) After considering the recommendation of the committee 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 fix, or as the case may be, revise the minimum rates of wages 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 in the manner specified in clause ( b) of sub-section (1), it shall also
consult concerned Advisory Board constituted under section 42.
(4) The appropriate Government shall review or revise minimum rates of wages ordinarily at an interval
not exceeding five years.
Questions for Discussion from
participants