Under the Minimum Wages Act, State and Central Governments have the power to fix and revise minimum wages. The act specifies that the “Appropriate” government should fix the wages i.e. if the wages to be fixed are in relation to any authority of Central government or Railway administration then the Central government fixes it. However, if the wage rate is to be fixed or revised for a scheduled employment, the respective state governments fix it. The Centre fixes the National floor level Minimum Wage that is lower than most states’ respective minimum wages. The ambiguity and overlap in the jurisdiction of both these tiers of government have caused debates and controversies. One of such debates revolves around fixing wage rates of MGNREGA scheme, an employment guarantee initiative by the Central Government
As per Section 5 of the Minimum Wages Act, 1948, there are two ways of fixing and/or revising minimum wages:
- Committee Method: Committees and Sub-committees are set up to make recommendations or create inquiries.
- Notification Method: The government publishes proposals and an official date in the Official Gazette. All advice and recommendations from various committees and sub-committees as well as representations are collected before the specified official date and the government then proceeds to fix/revise minimum wages.
The Central Government is the proper authority for enforcement of the act. Schedule employment is carried under the railway administration, mines, oilfield, major port and corporation established by Central Act. Chief Labour Commissioner is charged under central level, and at state level officers in industrial relations are charged for enforcement act and other labour laws.
Process of complaints
To process complaints the appropriate government can appoint a labour commissioner, Commissioner for Workmen’s Compensation, or officer with experience as a judge of Stipendiary Magistrate or an officer that is at least above the rank of Labour Commissioner. If an individual feels that he/she is being paid less than the minimum wages specified for his region/sector/occupation, or is not paid for a duration of work, a complaint can be made to the appointed authority.
(1) The appropriate government may by notification in the Official Gazette appoint any Commissioner for Workmen’s Compensation or any officer of the Central Government exercising functions as a Labor Commissioner for any region or any officer of the State Government not below the rank of Labor Commissioner or any other officer with experience as a judge for a civil court or as a Stipendiary Magistrate to be the authority to hear and decide for any specified area all claims arising out of payment of less than the minimum rates of wages or in respect of the payment of remuneration for days of rest or for work done on such days under clause (b) or clause (c) of sub-section (1) of section 13 or of wages at the overtime rate under section 14 to employees employed or paid in that area.
(2) Where an employee has any claim of the nature referred to in sub-section (1) the employee himself or any legal practitioner or any official of a registered trade union authorized in writing to act on his behalf or any Inspector or any person acting with the permission of the authority appointed under sub-section (1) may apply to such authority for a direction under sub-section (3):
Provided that every such application shall be presented within six months from the date on which the minimum wages or other amount became payable:
Provided Further that any application may be admitted after the said period of six months when the applicant satisfies the authority that he had sufficient cause for not making the application within such period.
(3) When any application under sub-section (2) is entertained the authority shall hear the applicant and the employer or give them an opportunity of being heard and after such further inquiry if any as it may consider necessary may without prejudice to any other penalty to which the employer may be liable under this Act direct:
(i) in the case of a claim arising out of payment of less than the minimum rates of wages the payment to the employee of the amount by which the minimum wages payable to him exceed the amount actually paid together with the payment of such compensation as the authority may think fit not exceeding ten times the amount of such excess;
(ii) in any other case the payment of the amount due to the employee together with the payment of such compensation as the authority may think fit not exceeding ten rupees;
and the authority may direct payment of such compensation in cases where the excess or the amount due is paid by the employer to the employee before the disposal of the application.
(4) If the authority hearing any application under this section is satisfied that it was either malicious or vexatious it may direct that a penalty not exceeding fifty rupees be paid to be employer by the person presenting the application.
(5) Any amount directed to be paid under this section may be recovered:
(a) if the authority is a Magistrate by the authority as if it were a fine imposed by the authority as a Magistrate or
(b) if the authority is not a Magistrate by any Magistrate to whom the authority makes application in this behalf as if it were a fine imposed by such Magistrate.
(6) Every direction of the authority under this section shall be final.
(7) Every authority appointed under sub-section (1) shall have all the powers of a civil court under the Code of Civil Procedure 1908 (5 of 1908) for the purpose of taking evidence and of enforcing the attendance of witnesses and compelling the production of documents and every such authority shall be deemed to be a civil court for all the purposes of section 195 and Chapter XXXV of the Code of Criminal Procedure 1898 (5 of 1898).