Introduction to the Minimum Wages Act, 1948

The Minimum Wages Act, 1948 (Act No. 11 of 1948) is a landmark piece of labor legislation in India, enacted on March 15, 1948. It was introduced to protect workers in unorganized sectors from exploitation by ensuring they receive a minimum level of remuneration for their labor. The Act applies to the whole of India and focuses on scheduled employments, which are low-paid, labor-intensive industries where workers are vulnerable to low wages due to lack of bargaining power.

The preamble of the Act states: “An Act to provide for fixing minimum rates of wages in certain employments. Whereas it is expedient to provide for fixing minimum rates of wages in certain employments.” This reflects its core purpose: to establish a statutory minimum wage floor to prevent sweat labor and ensure a basic standard of living. The Act empowers both the Central and State Governments (referred to as the “appropriate Government”) to fix, review, and revise minimum wages periodically, taking into account factors like cost of living.

Over the years, the Act has been amended several times (e.g., in 1954, 1957, 1961) to refine procedures, expand coverage, and address practical issues. It remains a foundational law for wage regulation, though it has been influenced by subsequent legislation like the Code on Wages, 2019. For study purposes, understanding this Act is crucial for topics in labor law, industrial relations, and social justice in India.

Objectives of the Act

The primary objectives of the Minimum Wages Act, 1948, are derived from its provisions and judicial interpretations. They include:

• Prevention of Exploitation: To safeguard workers in scheduled employments from being paid unfairly low wages, especially in industries with weak unionization.
• Ensuring Minimum Standard of Living: By fixing wages that account for basic needs like food, shelter, clothing, and education, aligned with cost of living indices.
• Promotion of Social Justice: To reduce income inequality and provide economic security to vulnerable workers, including women, children, and unskilled laborers.
• Flexibility in Wage Fixation: Allowing governments to tailor wages based on regions, industries, worker categories (e.g., adults, adolescents), and economic conditions.
• Periodic Review and Revision: Mandating reviews every five years or earlier to adjust for inflation and changing economic scenarios.
• Enforcement Mechanisms: Establishing inspectors, claims authorities, and penalties to ensure compliance.
• Coverage Expansion: Empowering governments to add new employments to the Schedule, broadening protection over time.

The Act balances employer interests by allowing exemptions in certain cases (e.g., for disabled employees) and considering industrial disputes.

Key Definitions as Mentioned in the Act (Section 2: Interpretation)

Section 2 provides the foundational definitions for the Act. These are crucial for interpreting its provisions. Below is a comprehensive list of key definitions exactly as mentioned in the Act (unless there is anything repugnant in the subject or context):

• Adolescent: Means a person who has completed his fourteenth year of age but has not completed his eighteenth year.
• Adult: Means a person who has completed his eighteenth year of age.
• 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, oilfield 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.
• Child: Means a person who has not completed his fourteenth year of age.
• Competent Authority: Means the authority appointed by the appropriate Government by notification in its Official Gazette to ascertain from time to time the cost of living index number applicable to the employees employed in the scheduled employments specified in such notification.
• Cost of Living Index Number: In relation to employees in any scheduled employment in respect of which minimum rates of wages have been fixed, means the index number ascertained and declared by the competent authority by notification in the Official Gazette to be the cost of living index number applicable to employees in such employment.
• Employer: Means any person who employs, whether directly or through another person, or whether on behalf of himself or any other person, one or more employees in any scheduled employment in respect of which minimum rates of wages have been fixed under this Act, and includes, except in sub-section (3) of section 26— (i) in a factory where there is carried on any scheduled employment in respect of which minimum rates of wages have been fixed under this Act, any person named under clause (f) of sub-section (1) of section 7 of the Factories Act, 1948 (63 of 1948), as manager of the factory; (ii) 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; (iii) in any scheduled employment under any local authority in respect of which minimum rates of wages have been fixed under this Act, the person appointed by such authority for the supervision and control of employees or where no person is so appointed, the chief executive officer of the local authority; (iv) in any other case where there is carried on any scheduled employment in respect of which minimum rates of wages have been fixed under this Act, any person responsible to the owner for the supervision and control of the employees or for the payment of wages.
• Prescribed: Means prescribed by rules made under this Act.
• Scheduled Employment: Means an employment specified in the Schedule, or any process or branch of work forming part of such employment.
• 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.
• Employee: Means any person who is employed for hire or reward to do any work, skilled or unskilled, manual or clerical, in a scheduled employment in respect of which minimum rates of wages have been fixed; and includes an out-worker to whom any articles or materials are given out by another person to be made up, cleaned, washed, altered, ornamented, finished, repaired, adapted or otherwise processed for sale for the purposes of the trade or business of that other person where the process is to be carried out either in the home of the out-worker or in some other premises not being premises under the control and management of that other person; and also includes an employee declared to be an employee by the appropriate Government; but does not include any member of the Armed Forces of the Union.

These definitions are exhaustive and help in delineating the scope of the Act. For example, “wages” excludes certain perks to focus on core remuneration, while “employee” broadly covers out-workers to prevent evasion.

Key Provisions of the Act

The Act is divided into 31 sections, covering wage fixation, payment, enforcement, and miscellaneous aspects. Below is a detailed summary of major provisions:

Wage Fixation and Revision (Sections 3-5, 10)

• Section 3: Fixing of Minimum Rates of Wages: The appropriate Government must fix minimum wages for scheduled employments in Parts I and II of the Schedule. It can fix different rates for time work, piece work, guaranteed time rate, or overtime. Rates can vary by employment, class of work, worker category (adults, adolescents, children, apprentices), and locality. Reviews must occur at intervals not exceeding five years, with revisions if necessary. If employment has fewer than 1,000 workers statewide, fixation can be refrained until it reaches that threshold.
• Section 4: Minimum Rate of Wages: Wages can include a basic rate plus cost of living allowance (adjusted for inflation), cash value of concessions (e.g., subsidized food), or an all-inclusive rate. The competent authority computes these based on government directions.
• Section 5: Procedure for Fixing and Revising Minimum Wages: Two methods: (a) Appoint committees/sub-committees for inquiries and advice, or (b) Publish proposals in the Official Gazette for public representations (at least two months’ notice). After considering advice/representations, notify fixed/revised rates, effective after three months unless specified otherwise. For revisions via publication, consult the Advisory Board.
• Section 10: Correction of Errors: Allows notification to correct clerical, arithmetical, or accidental errors in wage orders, with information to the Advisory Board.

Advisory Bodies (Sections 7-9)

• Section 7: Advisory Board: Appointed by the appropriate Government to coordinate committees and advise on wage fixation/revision.
• Section 8: Central Advisory Board: Appointed by the Central Government to advise on national-level matters and coordinate state boards. Comprises equal employer-employee representatives and independent members (up to one-third), with one as Chairman.
• Section 9: Composition of Committees, etc.: All bodies have equal employer-employee nominees and independent members (up to one-third), with one independent as Chairman.

Payment and Working Conditions (Sections 11-17)

• Section 11: Wages in Kind: Wages must be paid in cash, but customary in-kind payments or concessional supplies can be authorized via notification, with cash value estimated as prescribed.
• Section 12: Payment of Minimum Rates of Wages: Employers must pay at least the fixed minimum without unauthorized deductions, subject to prescribed conditions. Does not affect the Payment of Wages Act, 1936.
• Section 13: Fixing Hours for a Normal Working Day, etc.: Government can fix normal working hours (with intervals), mandate a weekly rest day with remuneration, and require overtime pay for rest-day work. Exceptions for urgent/emergency work, intermittent employment, etc., as prescribed.
• Section 14: Overtime: For work exceeding normal hours, pay at the higher of the Act’s overtime rate or applicable law (e.g., Factories Act).
• Section 15: Wages of Worker Who Works for Less Than Normal Working Day: Entitled to full day’s wages unless failure is due to unwillingness or prescribed circumstances.
• Section 16: Wages for Two or More Classes of Work: Pay based on time spent in each class at the respective minimum rate.
• Section 17: Minimum Time Rate Wages for Piece Work: If only time rate is fixed, pay at least that for piece workers.

Enforcement and Compliance (Sections 18-19, 22-23)

• Section 18: Maintenance of Registers and Records: Employers must maintain prescribed records of employees, work, wages, etc., and display notices.
• Section 19: Inspectors: Appointed with powers to enter premises, examine persons, seize records, etc. Deemed public servants.
• Section 22: Penalties for Certain Offences: Imprisonment up to 6 months or fine up to ₹500 (or both) for paying less than minimum or contravening hours/rules. Court considers prior compensation.
• Section 22A: General Provision for Punishment of Other Offences: Fine up to ₹500 for other contraventions.
• Section 22B: Cognizance of Offences: Specific timelines and sanctions required for complaints.
• Section 22C: Offences by Companies: Liability on persons in charge, unless they prove diligence.
• Section 23: Exemption of Employer from Liability in Certain Cases: Employer can shift blame to actual offender if due diligence is proven.

Claims and Remedies (Sections 20-21, 24-25)

• Section 20: Claims: Authority (e.g., Labour Commissioner) hears claims for underpayment, overtime, etc. Can award up to 10 times excess as compensation. Applications within 6 months (extendable for cause). Authority has civil court powers; decisions final.
• Section 21: Single Application in Respect of a Number of Employees: Allows group claims, with capped compensation.
• Section 24: Bar of Suits: No civil suits for wages if covered by claims under Section 20.
• Section 25: Contracting Out: Any agreement reducing minimum wages rights is void.

Miscellaneous Provisions (Sections 26-31)

• Section 26: Exemptions and Exceptions: Government can exempt disabled employees, certain classes/locality/establishments (if wages exceed prescribed limit), or family members.
• Section 27: Power of State Government to Add to Schedule: After 3 months’ notice, add employments via notification.
• Section 28: Power of Central Government to Give Directions: To states for execution.
• Section 29: Power of the Central Government to Make Rules: For Central Advisory Board procedures.
• Section 30: Power of Appropriate Government to Make Rules: Broad powers for rules on committees, computations, publicity, hours, records, etc.
• Section 30A: Rules Made by Central Government to be Laid Before Parliament: Rules subject to parliamentary scrutiny.
• Section 31: Validation of Fixation of Certain Minimum Rates of Wages: Validates past fixations despite procedural lapses in specified periods.

The Schedule (See Sections 2(g) and 27)

The Schedule lists employments where minimum wages apply. It is divided into Part I (general industries) and Part II (agriculture). Governments can add to it.

Part I

Sl. No.	Employment
1	Employment in any woollen carpet making or shawl weaving establishment.
2	Employment in any rice mill, flour mill or dal mill.
3	Employment in any tobacco (including bidi making) manufactory.
4	Employment in any plantation, that is to say, any estate which is maintained for the purpose of growing cinchona, rubber, tea or coffee.
5	Employment in any oil mill.
6	Employment under any local authority.
7	Employment on the construction or maintenance of roads or in building operations.
8	Employment in stone breaking or stone crushing.
9	Employment in any lac manufactory.
10	Employment in any mica works.
11	Employment in public motor transport.
12	Employment in tanneries and leather manufactory.
–	Employment in gypsum mines.
–	Employment in barytes mines.
–	Employment in bauxite mines.
–	Employment in manganese mines.
–	Employment in the maintenance of buildings and employment in the construction and maintenance of runways.
–	Employment in China Clay mines.
–	Employment in Kyanite mines.
–	Employment in Copper mines.
–	Employment in clay mines covered under the Mines Act, 1952.
–	Employment in magnesite mines covered under the Mines Act, 1952.
–	Employment in white clay mines.
–	Employment in stone mines.
–	Employment in steatite (including the mines producing Soapstone and Tale).
–	Employment in Ochre Mines.
–	Employment in Asbestos mines.
–	Employment in Fire Clay mines.
–	Employment in Chromite mines.
–	Employment in quartzite mines.
–	Employment in quartz mines.
–	Employment in silica mines.
–	Employment in graphite mines.
–	Employment in feldspar mines.
–	Employment in laterite mines.
–	Employment in dolomite mines.
–	Employment in redoxide mines.
–	Employment in wolfram mines.
–	Employment in iron ore mines.
–	Employment in granite mines.

Part II

1. Employment in agriculture, that is to say, in any form of farming, including the cultivation and tillage of the soil, dairy farming, the production, cultivation, growing and harvesting of any agricultural or horticultural commodity, the raising of livestock, bees or poultry, and any practice performed by a farmer or on a farm as incidental to or in conjunction with farm operations (including any forestry or timbering operations and the preparation for market and delivery to storage or to market or to carriage for transportation to market of farm produce).

Amendments and Judicial Insights

The Act has seen amendments to streamline processes (e.g., omission of Section 6 on advisory committees in 1957) and validate past actions (Section 31). Key judicial pronouncements (e.g., Bijay Cotton Mills vs. State of Ajmer, 1955) affirm that minimum wages are a constitutional imperative under Article 23 (prohibition of forced labor) and Article 43 (living wage). Courts have emphasized that wages must cover basic needs, not just survival.

Conclusion

The Minimum Wages Act, 1948, is a vital tool for worker protection, emphasizing equity and periodic adjustment. For exams, focus on definitions, fixation procedures, and enforcement. Practice questions: Explain the role of advisory boards; Discuss penalties for non-compliance