Procedure for fixing Minimum wage

There were several objectives that this Act needed to ensure:

  • Minimum wages need to be ensured to all blue-collar workers in the organized sector.
  • Prohibition of exploitation of labour in the workplace.
  • The Act would empower the government to fix minimum wages and revise those wages from time to time according to the economic situation of the country.
  • To ensure the application of this Act to a maximum number of organized sector employers.

(1) In fixing minimum rates of wages in respect of any scheduled employment for the first time under this Act or in revising minimum rates of wages so fixed, the appropriate Government shall either:

(a) Appoint as many committees and sub-committees as it considers necessary to hold enquiries and advise it in respect of such fixation or revision, as the case may be, or

(b) By notification in the Official Gazette, 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 will be taken into consideration.

(2) After considering the advice of the committee or committees 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 in the Official Gazette, fix, or, as the case may be, revise the minimum rates of wages in respect of each scheduled employment, 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 by the mode specified in clause (b) of sub-section (1), the appropriate Government shall consult the Advisory Board also.]

Fixation of Minimum Rates of Wages, Working Hours and Determination of Wages and Claims, etc.

Section 3 of the Act mentions all the procedures. Section 3(2) suggests that the appropriate government shall fix the following keeping all the considerations in the formulation of policies:

  • Minimum piece rate;
  • Minimum time rate;
  • Overtime rate; This must be a substitution of the rate which was pre-decided by the employer;
  • Guaranteed time rate system.

The government has to revise the minimum rates. In order to do that, the following things need to be kept in mind:

  • The rates vary from every locality, Scheduled Employment, apprentices, children, adolescents and adults.
  • The rates may be fixed, monthly, weekly, daily or hourly. This time may be fixed for a longer wage period as well.

Fixation of minimum rates of wages

The policy formulation regarding minimum wage happens only after due deliberation on the following:

  • The minimum wages must be in compliance with the cost-of-living index of the employees.
  • The basic wage rate with or without the cost-of-living allowance along with the authorised cash value of concessions pertaining to the supply of essential basic commodities at subsidized rates.
  • Comprehensive basic wage rate will include the cash value of the concessions, cost of living and the basic rate.

Procedure for fixing and revising minimum wages

Section 5 of the Act gives the procedure for fixing and revising the minimum wages. The appropriate government shall appoint committees and subcommittees that may be able to advise on the fixation of minimum wages. The appropriate government is also supposed to publish the minimum wage fixation in the newspapers so as to inform the stakeholders regarding the changes implemented. This publication has to be done at least before two months of the implementation. The stakeholders may also raise issues if any after the publication. The ascertainment of the minimum wage is then published in the Official Gazette. There may also be consultations regarding the revision of wages, with the Advisory Board. One may wonder, what constitutes an Advisory Board. Let us know what is it and its constitution.

Advisory Board

Section 7 of the Act suggests the formation of the Advisory Board. The government requires advice regarding the living cost indices, the requirements etc. An advisory board helps with the same requirements that were mandated under Section 5 of the Act.

Central Advisory Board

The Act also provides for the formation of a Board of Boards, for the management and regulation of all the Advisory Boards of India. This board shall comprise of members elected by the Central Government and the employees of the advisory boards. The formation of this board is given in Section 8 of the Act.

Composition of committees

Section 9 of the Act consists of the composition of the committees. It is mentioned that the committee shall comprise of members, who are elected by the employees of the scheduled employment. This committee will also contain the members from the scheduled employees but that must not exceed one-third of the total number of committee members.

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