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THE MINIMUM WAGES ACT, 1948

Scope and Coverage
The Act extends to the whole of India and applies to all establishments employing one or more persons and engaged in any of the scheduled employments.

Employees Entitled
The Act covers every employee engaged in any Scheduled Employment, including an 'out-worker' to whom the materials are given out for manufacturing or processing at his own premises.

Administrative Authority
The Minimum Wages Act is a Central legislation; however, its enforcement is administered by the Central and State Governments in their respective spheres. The State Government shall fix the minimum rates of wages in respect of the various scheduled employments, make the rules, appoint Inspectors and an Authority to decide claims relating to non-payment of minimum wages.

Committees & advisory Board
The appropriate Government shall appoint such committees and sub-committees as may be necessary, to hold inquiries and advise it in respect of fixation or revision of minimum rates of wages. (Sec. 5)
The Government has also appointed Advisory Boards for the purpose of co-ordinating the work of the committees and sub-committees and advising it generally in the matter of fixing and revising minimum rats of wages. (Sec. 7)
Each committee, sub-committee and the Advisory Boards to be constituted by persons nominated by the Central Government, equally representing the employers and employees in the scheduled employment. One third shall be independent person one of whom shall be appointed as the Chairman.

Central Advisory Board
The Central Government has appointed a Central Advisory Board for advising the Central and State Governments in the matters of the fixation and revision of minimum rates of wages and other matters, and for co-ordinating the work of the Advisory Boards.

Wages - Definition & Meaning
As per Section 2(h) of the Act -
(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 Pension Fund or Provident Fund or under any scheme of social insurance;
iii.) any travelling allowance or the value of any travelling concession;
iv.) any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment; or
v.) any gratuity payable on discharge.
Commission on turnover if paid as per terms and conditions of employment, then it would constitute the part of the wages. However, the employee should not be paid wages including commission, which are less than the prescribed minimum wages.

Fixation of Minimum Rates of Wages
The State Government is empowered to fix minimum rates of wages for different classes of employees - skilled, unskilled, clerical, supervisory etc. employed in any Scheduled employment and to review and revise the same from time to time, the interval between two revisions not exceeding 5 years considering the change in price index and dearness allowance.

Fixation of working hours etc.,
In regard to any scheduled employment in respect of which minimum rates of wages have been fixed, the Government may -

a) fix the number of working hours constituting a normal working day, inclusive of one or more intervals;
b) provide for a rest day with wages, in every period of 7 days; and
c) provide for payment for work on a rest day at a rate not less than the overtime rate.

Wages for two or more classes of work

Where an employee does two or more classes of work, to each of which a different minimum rate of wages is applicable, the employer shall 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. (Sec. 16)

Obligations of Employers
1. Payment of Minimum Wages
The employer is bound to pay to every employee engaged in a scheduled employment under him wages at a rate not less than the minimum rates of wages fixed for that class of employee in that employment, without making any deduction therefrom except those permitted under the Payment of Wages Act. (Sec. 12)

2. Wages in Cash/Kind
As a rule the wages payable under the Act should be paid in cash. The appropriate Government may, however, permit the payment of wages wholly or partly in kind, keeping in view the prevailing custom, and also allow the supply of essential commodities at concessional rates. (Sec. 11)

3. Overtime Wages
If an employee works on any day in excess of the normal working hours, the employer shall pay to him overtime wages for every hour or for part of an hour, so worked in excess, at the rate prescribed under this Act, or under any other law, whichever is higher.
As per Factories Act, overtime wages are to be paid at twice the normal rate of wages.
4. Return, Registers and Records
The employer is required to furnish an annual return in Form No. III by the 1st February of the succeeding year.
The employer should maintain the prescribed registers and records giving particulars of employees employed by him, the work performed by them, the wages paid to them, the receipts given by them, etc.
The employer shall also issue wage-books or wage-slips to the employees if required by the Government and make authenticated entries therein. (Sec.18)

5. Payment of Undisbursed Amounts

If any amount payable to an employee as wages or otherwise under this Act, remains undisbursed on account of death of the employee or his whereabouts not being known, then the same shall be deposited by the employer with the prescribed authority. (Sec. 22-D)

Rights of Employees
The obligation of employers are practically the rights of the employees. The employees have a right to file claims arising out of payment of less than minimum rates of wages or wages for rest days, overtime etc. before the appropriate authority within 6 months from the date the wages become payable. Delayed application can also be entertained provided there is sufficient cause for the delay.

Contracting out is Void

Any contract or agreement whereby an employee relinquishes or reduces his right to minimum wages or any privilege or concession accruing under the Act, shall be null and void. (Sec. 25)

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