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MINIMUM WAGES ACT, 1948 – AN OVERVIEW

Charu Latha


What is the rationale behind enacting such legislation?

In a free market, the wages payable is determined by the demand and supply. In India, with the prevalence of a competitive market (ie) where the supply always exceeds the demand, the labour class is by and large not organized to protect its interests. Moreover, in a country that is still developing, the exploitation of labour is visible, especially in the form of employment for meagre wages.


To prevent the exploitation of workers, called “THE MINIMUM WAGES ACT, 1948” was enacted wherein, the appropriate Government is authorized to take steps to prescribe minimum rates of wages in scheduled industries. The object of this legislation has also been reinstated in various judgments of the Apex Court.


In ‘Hydro (Engineers) Pvt. Ltd vs Workmen, it was held that, “The Act contemplates that the minimum wage rates must ensure not merely the physical needs of the worker which would keep him just above the starvation level but, to preserve his efficiency as that of a workman, in addition to his sustenance and that of his family’s, by providing for some measure of education, medical requirements and amenities”.


Important provisions dealt under the Legislation:

  • Section 3: deals with the Fixing of a minimum rate of wages. The provision has authorized the appropriate Government to fix minimum wages for the employees employed in the Scheduled industries. It has also been mandated to review the wages so fixed wherein, the maximum interval between 2 reviews shall not exceed 5 years.


It is pertinent to note that the appropriate Government can refrain from fixing minimum wages in case of scheduled industries, where the number of employees is less than one thousand . The wages fixed could either be on ‘time work’ or ‘piece work’. The legislation permits differentiation whilst fixing or revising wages depending on the classes of work, age of the employees, localities, etc.


  • Section 4: states that, where a minimum rate of wages has been fixed by the appropriate Government, the minimum rate of wages may

consist of –

  1. Basic rate of wages + special allowance (at a rate that can be altered); or

  2. Basic rate of wages with or without the cost of living allowance + the cash value of the concessions, in respect of supplies of essential commodities at concession rates (in authorized cases); or

  3. an all-inclusive rate allowing for the basic rate, the cost of living allowance, and the cash value of the concessions, if any.


  • The amount fixed shall be carried by a stepwise process as enumerated under Section 5 of the legislation, wherein it has been stated that committees and subcommittees are to be appointed for discussions for fixation of the minimum rate of wages. A notification shall be published in the Official Gazette by the appropriate government notifying the fixation or revision in the minimum rate of wages.


The penal provisions mentioned under the legislation for non-compliance.


It has been prescribed under Section 22 of the Act that, any employer who pays to any employee less than the minimum rates of wages fixed for that employee's class of work, or less than the amount due to him under the provisions 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.



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