Minimum Wages Act, 1948: Objectives, Need and Provisions

What is Minimum Wages Act, 1948?

Minimum Wages Act, 1948 ensures workers receive fair compensation and don’t face any form of abuse. The International Labour Organisation defines minimum wage as the lowest amount of remuneration that an employer is required to pay wage earners for the work performed during a given period which cannot be reduced by collective agreement or an individual contract. The purpose of this act is to protect the workers from unduly low pay enable them to earn adequate wages for the work done by them and maintain a minimum living standard of workers.

India’s labor laws include important laws like the Minimum Wages Act, 1948 and the Payment of Bonus Act, 1965. The Indian Constitution places labor laws under the Concurrent List. It provides the federal and state governments the authority to enact laws and regulations about the subject. These laws are important because they safeguard employees’ rights and interests, give them job opportunities, keep them safe from exploitation, and foster a positive work environment. It has been widely acknowledged that the minimum wage system helps to reduce poverty and stabilize the economy.

Geeky Takeaways:

• To ensure that workers receive fair compensation and to stop employers from abusing their labour force, the Indian Parliament passed the Minimum Wages Act, 1948.
• The purpose of the Act is to give both skilled and unskilled labourers a reasonable standard of living by setting minimum wage rates and fixing them.
• The Central Government and State Governments are empowered by the Act to regulate, review, and amend the minimum wage rates for employees working in scheduled employment that fall under their respective purviews.

Objectives of Minimum Wages Act, 1948

The objectives of the Minimum Wages Act, 1948 are as follows:

• The law makes sure that workers are paid enough to cover their essential expenses and maintain a respectable standard of living.
• To establish wages and prohibit employers from paying excessively low wages, and safeguard employees against being exploited.
• The law resolves economic inequalities and assures fair and just compensation for labor and these are the two ways to advance social justice.
• To increase productivity and make sure that employees receive fair compensation, which may boost morale and efficiency.
• To provide fair wages to workers and their families, the government can help lift them out of poverty.
• To reduce the number of labor disputes that result from wage-related complaints to promote industrial peace.
• To establish a uniform framework for calculating minimum wages that takes into consideration the location, type of work, and skill of the employee.
• To preserve a balance between the interests of employers and employees, the law supports a stable labor market and contributes to economic stability.

Need for Minimum Wages Act, 1948

The minimum wages set for laborers in India are so low that, even after deducting the costs of housing, healthcare, and education, there is barely enough money for two meals a day. There should be two main reasons why minimum wages for workers should be set:

1. Social Goals: By giving workers a minimal standard of living, the minimum wage helps to end poverty.

2. Economic Goals: The minimum wage should be set at a rate that encourages employees to work hard at their jobs, boosting the nation’s economy and raising living standards.

The active support of labor associations, trade unions, and employees is necessary for minimum wage legislation to be implemented in India due to the following reasons:

• The Indian Legislature passed the Minimum Wages Act, 1948 to address issues pertaining to paying workers the minimum wage so they could meet their basic needs and maintain a respectable standard of living.
• The act also ensures that all laborers receive a safe and sufficient living wage and that an employee makes enough money to support his family.
• The act gives the government bodies the authority to set the minimum wage.
• In order to keep up with the fluctuating costs of necessities, the Minimum Wages Act, 1948 established a mechanism for minimum wage revision.
• By establishing advisory boards to mediate disagreements between employers and employees over minimum wage payments, the act aims to better protect workers’ rights.
• The act additionally designates a Commissioner for Workmen’s Compensation or any other Central Government officer performing duties as a Labour Commissioner for any region, with prior judicial experience, to hear and determine cases pertaining to non-payment or payment of laborers less than the minimum wage.
• According to the act, employers who violate any of its rules or orders or fail to pay their employees the minimum wage will also be subject to penalties.

Essential Provisions of Minimum Wages Act, 1948

1. Fixing and Revision of Wages:

The act gives the federal government and state governments the authority to set and recurrently adjust the minimum wage rates for various job categories, accounting for pertinent factors such as the cost of living and the nature of the work.

2. Scheduled Employment:

Each schedule under the act specifies the minimum wage rates that apply to different classes of work and groups employment into distinct categories. In addition, periodic reviews and modifications to these schedules are possible.

3. Component​ of Wages:

​​The act outlines the elements that make up the minimum wage rates, such as a base wage rate and special allowances at a rate that will be adjusted at intervals and in the way that may be specified.

4. Working Hours:

The act has provisions regarding working hours, outlining the number of hours that should be worked in a typical workday as well as the requirements and pay scales for overtime.

5. Payment Frequency:

It establishes the rate at which wages must be incurred, and that they are paid on time and not postponed for extended periods of time.

6. Maintenance of Records:

Employers are expected to keep and preserve records and registers that include information about their workers, the tasks they complete, the money they are paid, and the receipts they submit. Inspection of these records is allowed by law.

7. Advisory Board:

The act mentions that the appropriate government must appoint advisory boards to coordinate the works of the committees and subcommittees and also to advise the appropriate government in the matters of fixing and revising the minimum wage rates.

8. Kind of Wages under the Minimum Wages Act, 1948

Section 11 of the act specifies how employees will be paid their wages:

• Cash payments shall be made for minimum wages under this act.
• The appropriate government may authorize the payment of the minimum wage in kind or in full under certain circumstances by notifying the Official Gazette.
• A provision for essential commodities at concession rates was authorized by the appropriate government through notification in the official gazette.
• The act specifies the prescribed method for authorizing the cash value of wages and concession rates.
• According to Section 12 of the act, which stipulates that the employer must pay the minimum rate, wages must be paid to employees under this act.

Constitutional Validity of the Act

The court heard several challenges to this Act’s constitutional validity. The judiciary; however, was crucial in establishing the constitutional validity of the Act, which safeguards the workers’ rights to education, healthcare, food, shelter, and clothing, among other necessities. The judiciary has declared that paying employees less than the minimum wage is equivalent to using forced labor.

1. Not violative of Article 19 of the Constitution:

The Minimum Wages Act, 1948 was first contested as unconstitutional in the 1954 case of Bijay Cotton Mills Ltd. v. The State of Ajmer. Nonetheless, the Indian Supreme Court ruled that the Act’s provisions are constitutionally permissible under Article 19 of the Indian Constitution and are not unreasonable.

2. Not violative of Article 14 of the Constitution:

Furthermore, the Act is not violative of Article 14 of the Indian Constitution which states equality before the law. In the case of N.M. Wadia Charitable Hospital vs State of Maharashtra, 1986, it was held that fixing different rates of minimum wages for different localities is permitted under the Constitution and the labor laws of the country.

Conclusion

In order to protect the rights and interests of workers employed in certain scheduled classes of employment as defined by the act, the Minimum Wages Act, 1948 was passed. The act aims to give workers fair employment opportunities and sufficient compensation to maintain a respectable standard of living. The provisions of the act include setting working hours during a typical workday and reversing wages every five years, demonstrating how they guard against the mistreatment of employees. The act also creates committees and advisory boards that employees can contact to pursue remedies in situations where their employers fail to pay their wages or pay them late.

Minimum Wages Act, 1948- FAQs

What is Minimum Wages Act, 1948?

The Minimum Wages Act, 1948 is an act passed to safeguard employees’ rights and interests, give them job opportunities, keep them safe from exploitation and foster a positive work environment.

What are the objectives of the Minimum Wages Act, 1948?

To ensure that workers receive fair compensation and to stop employers from abusing their labor force, the Indian Parliament passed the Minimum Wages Act, 1948.

What is the meaning of minimum wages under the Minimum Wages Act, 1948?

Minimum wage is a rate that employers should set to encourage employees to work hard at their jobs, boosting the nation’s economy and raising living standards.

What is the constitutional safeguard of the Minimum Wages Act, 1948?

The court heard several challenges to this act’s constitutional validity. The judiciary; however, was crucial in establishing the constitutional validity of the act, which safeguards the workers’ rights to education, healthcare, food, shelter, and clothing, among other necessities. The judiciary has declared that paying employees less than the minimum wage is equivalent to using forced labor.