The procedure for the fixation and revision of minimum wages in India is governed by the Minimum Wages Act, 1948. The act provides a framework for determining and periodically revising minimum wages for different categories of workers in scheduled employments.
Overview of the Procedure for Fixing and Revising Minimum Wages
- Notification by Appropriate Government:
- The process begins with the appropriate government (central or state government) issuing a notification specifying the scheduled employments in which minimum wages are to be fixed or revised. These scheduled employments may include various industries, occupations, or sectors.
- Constituting Minimum Wages Advisory Board:
- The appropriate government may constitute Minimum Wages Advisory Boards at the central and state levels. These advisory boards typically include representatives from employers, employees, and independent experts. The boards play a crucial role in advising the government on wage fixation and revision.
- Gathering Wage Data:
- The advisory board, or in some cases, committees appointed for this purpose, collect relevant data on various factors that influence wage determination. This data includes cost of living, the level of skill required, prevailing wage rates in the region, and other economic factors.
- Factors Considered:
- The advisory board takes into account multiple factors when recommending minimum wage rates. These factors may include the basic needs of workers and their families, the living conditions in the region, the level of skill required for the job, and the capacity of employers to pay.
- Consultation and Recommendations:
- The advisory board consults with stakeholders, including employers’ and employees’ representatives, to gather their input and recommendations regarding minimum wages.
- After considering all relevant factors and stakeholder input, the advisory board makes recommendations to the appropriate government regarding the minimum wage rates to be fixed or revised.
- Fixation and Notification:
- The appropriate government reviews the recommendations of the advisory board and, after due consideration, issues a notification specifying the minimum wage rates for different categories of workers in the scheduled employments.
- These rates may vary based on factors such as skill levels, geographic locations, and the nature of the work.
- Revision:
- Minimum wage rates are not static and are subject to periodic revision to account for changes in the cost of living and economic conditions.
- The appropriate government may periodically review and revise the minimum wages, based on the recommendations of the advisory board and updated data.
- Enforcement:
- Once the minimum wage rates are fixed or revised, they become legally binding on employers in the scheduled employments. Employers are required to pay their employees at least the specified minimum wage rates.
- Penalties for Non-Compliance:
- The Minimum Wages Act also provides for penalties in case of non-compliance by employers. Employers who do not pay minimum wages or violate other provisions of the act can face fines and legal action.
