Procedure for Fixing and Revising Minimum Wages

Setting and adjusting minimum wages is a crucial part of labour and employment rules in many nations. Minimum wage regulations are made to set a basic level of payment that employers need to give to their workers for the work they do. These rules exist to guard workers against being taken advantage of, make sure they are paid fairly and ensure they can afford a reasonable way of life.

The process of deciding and changing minimum wages typically includes a mix of laws made by the government, and government organisations and discussions with various groups like worker unions, groups of employers and representatives of the workers. The exact steps and groups involved can differ from country to country. In India, the idea of minimum wages was introduced in 1920 by Mr. K.G.R Chaudhary. He proposed a bill to create a policy about minimum wages during an international meeting about labour.

Meaning of Minimum Wages

The minimum wage is the lowest pay that an employer has to give to workers for the work they do within a certain time frame. This pay can’t be made less through an agreement among workers or an individual contract. This rule comes from the International Labour Organisation (ILO), an international group. Around 90 countries that are part of the ILO follow this rule.

The main purpose of the minimum wage is to protect workers from getting paid too little. It helps them have a basic standard of living and get reasonable pay for the work they do. It’s also a way to fight against treating people unfairly based on their gender and to lessen poverty. In India, the Minimum Wages Act of 1948 is in charge of making sure the minimum wage is paid correctly and has the Minimum Wages Act has been held as constitutionally valid.

Minimum Rate of Wages Under The Act

According to Section 3 of the Minimum Wages Act, the lowest pay set by the Appropriate Government for specific jobs includes these factors:

• The basic wages and allowance for house rent might change based on the cost of living.
• The basic pay, with or without the house rent allowance, is determined by the cost of living index of the worker.
• Comprehensive rates include the basic pay, cost of living allowances and the value of materials given at a lower cost.

The term “minimum wages” isn’t explained in the Minimum Wages Act of 1948. This is probably because it wouldn’t be possible to decide on a single lowest pay that fits all industries across the country. Industries differ from one another and conditions change, so having the same minimum wage for all wouldn’t work.

Procedure for Fixing and Revising Minimum Wages

Section 5 of the Minimum Wages Act contains the procedure for fixing and revising minimum wages.

Section 5: Procedure for fixing and revising minimum wages.–

(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. 

Which Method is used to fix Minimum Wages?

Under Section 5 of the Minimum Wages Act, 1948, there are two methods used to fix minimum wages: the Committee Method and the Notification Method. Both methods aim to help the government reach a fair conclusion about setting the lowest pay.

Committee Method (Section 5(1))

This method involves the establishment of committees by the appropriate government. These committees are responsible for conducting inquiries, examining relevant factors such as cost of living, economic conditions and other considerations and then making recommendations for the fixation and revision of minimum wages for specific scheduled employments. The recommendations provided by the committees are taken into account by the government while determining the minimum wage rates.

Notification Method (Section 5(2))

This method involves the direct issuance of official notifications by the appropriate government specifying the minimum rates of wages applicable to various scheduled employments. The government uses its own judgment and considerations, including economic conditions and cost of living, to determine and declare the minimum wage rates for different jobs.

Both methods serve the purpose of ensuring that workers receive fair compensation for their labour while considering economic factors and maintaining a reasonable standard of living. The choice of method may vary depending on the circumstances and the nature of the scheduled employment.

What is the Revision of Minimum Wages under the Minimum Wages Act, 1948?

The revision of minimum wages under the Minimum Wages Act, 1948, refers to the process of reviewing and making changes to the established minimum wage rates. This revision can happen due to various reasons, such as changes in economic conditions, inflation, cost of living and other relevant factors. The purpose of revising minimum wages is to ensure that workers receive fair compensation that reflects the current economic circumstances and maintains a reasonable standard of living.

The government regularly checks the minimum wages and might adjust them when the economy changes, the cost of living goes up or other important factors change. These changes are shared through new official notices, which replace the old ones.

The notification method is a strong way to set and put into action minimum wages by the law. This method makes sure that employers know what they need to do and that workers have the right to get the set minimum wages for their work. This way of doing things is clear and makes sure that the wages are the same for the same type of job, while also helping with following the rules and making sure they’re followed.

Conclusion

The procedure for fixing and revising minimum wages involves either the Committee Method or the Notification Method as per the Minimum Wages Act, 1948. In the Committee Method, committees examine economic factors and recommend wage adjustments. In the Notification Method, the government directly issues official notifications with revised wage rates. Both methods ensure fair wages, aligning with economic conditions and living costs and promote transparency in wage determination across various employments.