LABOUR LAW
VI SEMESTER BBM 20112012
MODULE -02
INTRODUCTION
MINIMUM WAGES ACT, 1948
The Minimum Wages Act, 1948 was enacted to safeguard the interests of workers,
mostly in the unorganised sector by providing for the fixation of minimum wages in
certain specified employments. It binds the employers to pay their workers the
minimum wages fixed under the Act from time to time.
Under the Act, both the Central Government and the State Governments are the
appropriate Governments to fix, revise, review and enforce the payment of minimum
wages to workers in respect of 'scheduled employments' under their respective
jurisdictions. There are 45 scheduled employments in the Central sphere and as many
as 1530 in State sphere.
In the Central sphere, the Act is enforced through the Central Industrial Relations
Machinery (CIRM). CIRM is an attached office of the Ministry of Labour and is also
known as the Chief Labour Commissioner (Central) [CLC(C)] Organisation. The
CIRM is headed by the Chief Labour Commissioner (Central). While, the State Industrial
Relations Machinery ensures the enforcement of the Act at the State level.
The appropriate Government is required to appoint an Advisory Board for advising it,
generally in the matter of fixing and revising minimum rates of wages. The Central
Government appoints a Central Advisory Board for the purpose of advising the Central
and State Governments in the matters of the fixation and revision of minimum rates of
wages as well as for co-ordinating the work of Advisory Boards.
Minimum wage and an allowance linked to the cost of living index and is to be paid in
cash, though payment of wages fully in kind or partly in kind may be allowed in certain
cases. The minimum rate of wages consists of a basic wage and a special allowance,
known as 'Variable Dearness Allowance (VDA)' linked to the Consumer Price Index
Number. The allowance is revised twice a year, once in April and then in October.
APPLICABILITY
It extends to the whole of India and applies to scheduled employments in respect of
which minimum rates of wages have been fixed under this act.
OBJECT OF THE ACT
The object of the Act is to provide for fixing and revising minimum wages in certain
employments in order to stop sweated labour and prevent the exploitation of
unorganized labour.
The main objective of this Act, is fixing a minimum rate of wages in number of industries
where the labours are not organized and sweated labours are most dominant. The Act
aims at preventing the exploitation of workers or labours in some industries, for which,
1|Page Anita Walia
STRICTLY FOR PRIVATE CIRCULATION
LABOUR LAW
VI SEMESTER BBM 20112012
the appropriate Government is empowered to take steps to prescribe minimum rates of
wages in certain employment.
EMPLOYEE ENTITLED
SCHEDULED EMPLOYMENTS: An employment specified in the schedule, or any process
or branch of work forming part of such employment (Section-2g)
LIST OF EMPLOYMENTS ORIGINALLY INCLUDED IN THE SCHEDULE
1. Employment in any Woollen Carpet making or shawl Weaving Establishment
(not fixed).
2. Employment in any Rice mill, Flour millor Dhall mill.
3. Employment in any Tobacco (including beedi making ) Manufactory.
4. Employment in any Plantation, that is to say, any estate which is maintained for
the
5. purpose of growing cinchona, rubber, tea, coffee (or cardamom)
6. Employment in any Oil Mill.
7. Employment under any local authority.
8. Employment on the construction or maintenance of roads or in building
operations.
9. Employment in stone breaking or stone crushing.
10. Employment in any lac manufactory (not fixed)
11. Employment in any Mica works (not fixed)
12. Employment in Public Motor Transport.
13. Employment in Tanneries and leather manufactory.
DEFINITIONS
II(a)Minimum Wage
The Act under section 2(h) defines wages, but does not define “minimum wages”. As it is
not possible to bring down a uniform minimum wage for all the industries throughout
the country.
Section 2(h)"wages" means all remuneration capable of being expressed in terms of
money which would if the terms of the contract of employment express or implied were
fulfilled be payable to a person employed in respect of his employment or of work done
in such employment and includes house rent allowance but does not include (i) the value of (a) any house accommodation supply of light water medical attendance or
(b) any other amenity or any service excluded by general or special order of the
appropriate government;
(ii) any contribution paid by the employer to any person fund or provident fund or
under any scheme of social insurance;
(iii) any traveling allowance or the value of any traveling concession;
(iv) any sum paid to the person employed to defray special expenses entailed on him by
the nature of his employment; or
2|Page Anita Walia
STRICTLY FOR PRIVATE CIRCULATION
LABOUR LAW
VI SEMESTER BBM 20112012
(v) any gratuity payable on discharge;
Appropriate government [II. (b)]:
"appropriate government" means:
(i) in relation to any scheduled employment carried on by or under the authority of the
Central Government or a railway administration] or in relation to a mine oil field or major
port or any corporation established by a Central Act the Central Government and
(ii) in relation to any other scheduled employment the State Government;
II(a)(i)Essential Ingredient
1. Wage should be by way of remuneration
2. It should be capable of being expressed in terms of money.
3. It should be payable to a person employed in respect of his employment or of work
done in such employment.
4. It should be payable to a workmen.
5. It should be payable if the terms of employment, express or implied, are fulfilled.
6. It includes house rent allowance.
7. It does not include house accommodation, supply of light, water, medical attendance,
traveling allowance, contribution of employer towards provident fund, gratuity , any
scheme of social insurance etc.
II(b)Classification of Wages
The Supreme Court has classified “Wages” into three categories. They are:
1. The Living Wage ( highest standard of wage)
2. The Fair Wage (between living and minimum wage)
3. The Minimum Wage.( it is the lowest standard of wage)
The living and fair wages are acquired by workers with their “collective bargaining”.
When the workers have no unions and who have no capacity of collective bargain could
not demand the employers for their just and genuine wage. The State come to rescue
them through such legislations.
Scheduled Employment
in any scheduled employment under the control of any government in India in respect of
which minimum rates of wages have been fixed under this Act the person or authority
appointed by such government for the supervision and control of employees or where no
person or authority is so appointed the head of the department;
MAIN PROVISIONS UNDER THE ACT
1. Fixing of minimum rates of wages Section 3
Under the Minimum Wages Act, there are two methods for fixation/revision of
3|Page Anita Walia
STRICTLY FOR PRIVATE CIRCULATION
LABOUR LAW
VI SEMESTER BBM 20112012
minimum wages, namely:
Committee method - Under this method, committees and sub-committees are set up by
the appropriate Governments to hold enquiries and make recommendations with
regard to fixation and revision of minimum wages, as the case may be.

Notification method - Under this method, Government proposals are published in the
Official Gazette for information of the 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.
After considering the advice of the Committees/Sub-committees and all the
representations received by the specified date in Notification method, the appropriate
Government shall, by notification in the Official Gazette, fix/revise the minimum wage in
respect of the concerned scheduled employment and it shall come into force on expiry
of three months from the date of its issue. The Government may review the minimum
rates of wages and revise the minimum rates at intervals not exceeding five years.
The fixation of minimum wages depends on a number of factors such as level of income
and paying capacity, prices of essential commodities, productivity, local conditions, etc.
Since these factors vary from State to State, the wages accordingly differ throughout the
country.
Hence, in the absence of a uniform national minimum wage, the Central Government
introduced a 'national floor level minimum wage'. Initially, this minimum wage level
was fixed at Rs. 35/- per day and has been revised periodically.
The last revision being Rs. 66/- per day with effect from 1.2.2004, on the
recommendations of the Central Advisory Board. All the States/UTs Governments are
required to ensure that fixation/revision of minimum rates of wages in all the scheduled
employments is not below this national minimum wage.
.
Minimum rate of wages (Section 4)
Any minimum rate of wages fixed or revised may
consist of
a. a basic rate of wages and a special allowance ; or
i. a basic rate of wages with or without cost of living allowance and the cash
value of concessions in respect of supplies of essential commodities at
concessional rates; or
ii. an all inclusive rate allowing for the basic rate, the cost of living allowance
and the cash value of concessions, if any.
3
Procedure for fixing and revising minimum wages (section 5)
The appropriate Government is required to appoint an Advisory Board for advising it,
generally in the matter of fixing and revising minimum rates of wages.
The Central Government appoints a Central Advisory Board for the purpose of advising
the Central and State Governments in the matters of the fixation and revision of
4|Page Anita Walia
STRICTLY FOR PRIVATE CIRCULATION
LABOUR LAW
VI SEMESTER BBM 20112012
minimum rates of wages as well as for co-ordinating the work of Advisory Boards.
The Central Advisory Board consists of persons to be nominated by the Central
Government representing employers and employees in the scheduled employments, in
equal number and independent persons not exceeding one third of its total number of
members. One of such independent persons is to be appointed the Chairman of the
Board by the Central Government.
4
Wages in kind (section 11)
Minimum wages payable under this Act are to be paid in cash. However, the payment of
minimum wages can be made wholly or partly in kind, by notifying in the official
Gazette, where it is customary to pay wages either wholly or partly in kind.
5 Payment of minimum rate of wages (Section 12)
The employer is required to pay to every employee, engaged in a scheduled
employment under him, wages at a rate not less than the minimum rate of wages
notified for that class of employees without any deduction except as may be
authorised.( see the Payment of Wages Act 1936 (4 of 1936) for permissible deduction)
6. Fixing hours for normal working day (section 13)
In regard to any scheduled employment, minimum rates of wages in respect of which
have been fixed under this Act, the appropriate Government may
a. fix the number of hours of work which shall constitute a normal working
day, inclusive of one or more specified intervals;
b. provide for a day of rest in every period of seven days which shall be
allowed to all employees or to any specified class of employees and for the
payment of remuneration in respect of such days of rest;
c. provide for payment for work on a day of rest at a rate not less than the
overtime rate.
7. Overtime (Section 14)
If any employee whose minimum rate of wages is fixed under the Act works on any day
in excess of the number of hours constituting normal working day, the employer is
required to pay him for excess hours at the overtime rate fixed under this Act or under
any law of the appropriate Government for the time being in force, whichever is higher.
8. Wages for two or more classes of work (Section 16)
If an employee does two or more classes of work, to each of which a different rate of
wages is applicable, the employer is required to pay to such employee in respect of the
time respectively occupied in each such class of work, wages at not less than the
minimum rate in force in respect of each such class.
9.
Maintenance of registers and records(Section 18)
Every employer is required to maintain registers and records giving particulars of
employees, the work performed by them, the wages paid to them, the receipts given by
them and any other required particulars.
10
Inspections(Section 19)
5|Page Anita Walia
STRICTLY FOR PRIVATE CIRCULATION
LABOUR LAW
VI SEMESTER BBM 20112012
The appropriate Government may, by notification in the official Gazette, appoint
inspectors for the purpose of this Act and define the local limits for their functions.
11. Claims (Section 20)
The appropriate Government may, by notification in the official Gazette, appoint Labour
Commissioner or Commissioner for Workmen’s Compensation or any officer not below
the rank of Labour Commissioner or any other officer with experience as a judge of a
civil court or as a Stipendiary Magistrate, to hear and decide for any specified area, all
claims arising out of the payment of less than the minimum rates of wages as well as
payment for days of rest or for work done.
12. Penalties for Offences(Section 22)
Any employer who contravenes any provision of this Act shall be punishable with
imprisonment for a term, which may extend to six months or with fine, which may
extend to five hundred rupees or with both.
AUTHORITIES APPOINTED UNDER THE ACT:
Inspector: (Under Section-19)
 Labour Commissioner
 Additional Labour Commissioner (IR and E)
 Regional Joint Labour Commissioners
 Joint Labour Commissioner (P)
 Chief Inspector of Plantations
 Deputy Labour Commissioner (HQ)
 Dist Labour Officer (HQ)
 Additional Laboour Commissioner, Kozhikode
 Dist Labour Officers (E)
 Inspector of plantations
 Asst. Labour Officers – Grade II
Questions:
Q1. State the objective of minimum wages act,1948.
Q2. Define the following
a)competent authority
b)cost of living index c) wages
d)scheduled employment
e)appropriate authority
Q3. What are the factors which are taken into account by the appropriate government in
fixing the minimum rate of wages.
Q4.Expalin the method for fixation of wages.
Q5. Can wages be paid in Kind under the minimum wages act,1948?
6|Page Anita Walia
STRICTLY FOR PRIVATE CIRCULATION
LABOUR LAW
VI SEMESTER BBM 20112012
Q6 discuss and explain the rule regarding the following
1) Worker working less than the normal day.
2) Wages to an employee who does two or more classes of work.
3) Register and records to be maintained.
Q7. Describe the penalty and claims relating to dispute arising out of any offense made
under the minimum wages act,1948.
Q8 state the rules regarding overtime wages.
THE PAYMENT OF WAGES ACT - 1936
Contents of the Act:
Chapter 1 Introduction, Objects, (section 1 & 2) Applications and Definitions
Chapter 2 Payment and (section 3 to 13) Deduction of wages
Chapter 3 Authorities under the Act (section 14 to 19)
Chapter 4 Miscellaneous (section 20 to 26) Contents of the Act
SHORT TITLE, EXTENT, COMMENCEMENT AND APPLICATION.
1. Short title, extent, commencement and application.- This Act may be called the
Payment of Wages Act, 1936. 2. It extends to the whole of India.
DEFINITIONS:
In this Act, unless there is anything repugnant in the subject or context,
 EMPLOYED PERSON " includes the legal representative of a deceased employed
person;
 EMPLOYER " includes the legal representative of a deceased employer
Definitions
WAGES [SEC 2(VI)]:
WAGES • means all remunerations capable of being expressed in terms of money,
which would if the terms of the contract of employment, expressed or implied, were full
filled, be payable to person employed irrespective of his employment or of work done in
such employment and includes house rent allowances.
7|Page Anita Walia
STRICTLY FOR PRIVATE CIRCULATION
LABOUR LAW
VI SEMESTER BBM 20112012
RESPONSIBILITY FOR PAYMENT OF WAGES [SEC 3]:
Every employer shall be responsible for the payment to persons employed by him of all
wages required to be paid under this Act: Provided that, in the case of persons
employed (otherwise than by a contractor)—
(a) In factories, if a person has been named as the manager of the factory under section
7 of the Factories Act, 1948. (b)
(b) In industrial or other establishments, if there is a person responsible to the
employer for the supervision and control of the industrial or other establishments.
Responsibility for payment of wages [sec 3]
(c) Upon railways (otherwise than in factories), if the employer is the railway
administration and the railway administration has nominated a person in this behalf for
the local area concerned; the person so named, the person so responsible to the
employer, or the person so nominated, as the case may be, [shall also be responsible] for
such payment
FIXATION OF WAGE-PERIODS [SEC 4]:
Fixation of wage-periods.Every person responsible for the payment of wages under section 3 shall fix
periods (in this Act referred to as wage-periods) in respect of which such wages
shall be payable.
No wage-period shall exceed one month. Fixation of wage-periods [sec 4]
TIME OF PAYMENT OF WAGES [SEC 5]:
Time of payment of wages.- The wages of every person employed upon or in...
 Any railway, factory or [industrial or other establishment] upon or in which less
than one thousand persons are employed, shall be paid before the expiry of the
seventh day,
 Any other railway, factory or [industrial or other establishment], shall be paid
before the expiry of the tenth day, after the last day of the wage-period in respect
of which the wages are payable.
WAGES TO BE PAID IN CURRENT COIN OR CURRENCY NOTES [sec6 6]:
Wages to be paid in current coin or currency notes. All wages shall be paid in current
coin or currency notes or in both Wages to be paid in current coin or currency notes.
FINES [SEC 8]:
8|Page Anita Walia
STRICTLY FOR PRIVATE CIRCULATION
LABOUR LAW
VI SEMESTER BBM 20112012
 No fine shall be imposed on any employed person save in respect of such acts
and omissions on his part as the employer, with the previous approval of the
State Government or of the prescribed authority, may have specified by notice
under sub-section (2).
 A notice specifying such acts and omissions shall be exhibited in the prescribed
manner on the premises in which the employment is carried on or in the case of
person employed upon a railway (otherwise than in a factory), at the prescribed
place or places . Fines [sec 8]
 No fine shall be imposed on any employed person until he has been given an
opportunity of showing cause against the fine, or otherwise than in accordance
with such procedure as may be prescribed for the imposition of fines.
 The total amount of fine which may be imposed in any one wage-period on any
employed person shall not exceed an amount equal to [three per cent.] of the
wages payable to him in respect of that wage-period.
 No fine shall be imposed on any employed person who is under the age of fifteen
years.
DEDUCTION [SEC 7 TO 13]:
SEC 7(1) - says that every payment made by the employed person to the employer or
his agent shall,be deemed to be deduction from wages. It also lays down that any loss of
wages resulting from any imposition, upon a person, shall not be deemed to be a
deduction from wages.
I.Deductions for absence from duty.
Deductions may be made under section 7 only on account of the absence of an
employed person from the place or places where, by the terms of his
employment, he is required to work, such absence being for the whole or any
part of the period during which he is so required to work.
The amount of such deduction shall in no case bear to the wages payable to the
employed person in respect of the wage-period for which the deduction is made
a larger proportion than the period for which he was absent bears to the total
period, within such wage period, during which by the terms of his employment,
he was required to work:
II. Deductions for damage or loss.
A deduction under section 7 shall not exceed the amount of the damage or loss caused
to the employer by the neglect or default of the employed person. A deduction shall not
be made under (2) of section 7 until the employed person has been given an
opportunity of showing cause against the deduction, or otherwise than may be
prescribed for the making of such deductions..
9|Page Anita Walia
STRICTLY FOR PRIVATE CIRCULATION
LABOUR LAW
VI SEMESTER BBM 20112012
All such deductions and all realizations thereof shall be recorded in a register to be kept
by the person responsible for the payment of wages under section 3 in such form as
may be prescribed
III.Deductions for services rendered.:
A deduction of section 7 shall not be made from the wages of an employed person,
unless the house-accommodation amenity or service has been accepted by him, as a
term of employment or otherwise and such deduction shall not exceed an amount
equivalent to the value of the house-accommodation amenity or service supplied.
Deductions for services rendered.
IV.Deductions for recovery of advances.
Deductions under section 7 shall be subject to the following conditions, namely:- Recovery of an advance of money given before employment began shall be made
from the first payment of wages in respect of a complete wage-period, but no
recovery shall be made of such advances given for travelling expenses; recovery
of an advance of money given after employment began shall be subject to such
conditions as the State Government may impose;
 Recovery of advances of wages not already earned shall be subject to any rules
made by the State Government regulating the extent to which such advances
may be given and the instalments by which they may be recovered. Deductions
for recovery of advances.
V. Deductions for recovery of loans:
Deductions for recovery of loans granted under section 7 shall be subject to any rules
made by the State Government regulating the extent to which such loans may be
granted and the rate of interest payable thereon.
VI. Deductions for payments to co-operative societies and insurance schemes:
Deductions under section 7 shall be subject to such conditions as the State Government
may impose. Deductions for payments to co-operative societies and insurance schemes
AUTHORITIES UNDER THE ACT:
Inspector [sec 14] An Inspector of factory appointed under sec 8(1) of Factory Act shall
be an Inspector for the purpose of this Act in respect of all factories within the local
limits of assigned to him
PENALITIES [SEC20]:
10 | P a g e A n i t a W a l i a
STRICTLY FOR PRIVATE CIRCULATION
LABOUR LAW
VI SEMESTER BBM 20112012
Sec 20(1) of the act makes contravention of the provisions of the Act, by any person
responsible for the payment of wages to an employed person, punishable with fine
which shall not be less than one thousand five hundred rupees but which may extend to
seven thousand five hundred rupees]
CONTRACTING OUT [SEC 23]:
Any contract or agreement, whether made before or after the commencement of this
Act, whereby an employed person relinquishes any right conferred by this Act shall be
null and void in so far as it purports to deprive him of such right.
Questions :
Q1. Explain the object of the payment of wages act,1936.
Q2. Write a short note on applicability of the payment of wages act,1936.
Q3.state the rules regarding the following :
1)
2)
3)
4)
Time of payment of wages
Registers and records.
Deduction from wages.
Mode of payment of wages
Q4. Enumerate the different types of deductions which may be made from the wages of
an employed person under the the payment of wages act,1936.
Q5. What happens if 10 or more people absent themselves without due notice.
Q6. Describe the procedure related to the hearing of claims arising out of wrongful
deductions from wages?
Q7. What are the penalties for offences under the payment of wages act,1936.
11 | P a g e A n i t a W a l i a
STRICTLY FOR PRIVATE CIRCULATION