Employment Agreement

How to Stay Compatible with Your New Minimum Wages Act?

New Minimum Wages Act is applicable throughout India to protect the rights of the labourers who seek to earn a decent standard of living. Read this article to know the application of the wages Act.

The Indian Constitution defines ‘minimum wage’ as the income level for both skilled and non-skilled employees that make sure some level of comfort in addition to sustaining living standards for all classes of workers. This system not only fulfils the bare necessities but also puts a constant effort into improving the standards of living of the average Indian professional working class. 

Labour exploitation is prevented successfully by implementing clauses of this Act. This article is about the New Minimum Wages Act that has been enforced in India to promote the welfare of workers in general. 

Issuance and Amendment of Minimum Wages

As per the Minimum Wages law (1948), wages are to be affixed in collaboration with the Central and state governments who hold the rightful authority regarding this domain. The State governing bodies decide on their scheduled employments to publish the latest chart of Minimum Wages that are displayed alongside the variable dearness allowance (VDA). 

Periodic scrutiny is scheduled when wage boards are formed to revise and declare minimum wages. Different states portray varying figures in terms of wage distribution depending on a set of factors. Some of the determinants consist of the core skills of employees, sectors, industrial regions, and average occupation. 

Therefore we can arrive at the conclusion that no singular universal wage rate is fixed throughout India. Also, the revision cycle keeps on varying from one state to another. 

Objectives of the New Minimum Wages Act

  • To determine the lower limits of wages an employer is bound to provide all of his active workers and amend such rates of payouts in a period of 5 years
  • To secure the interest of the general population by assuring a minimum income for all working professionals
  • To allow the labourers to live peacefully and maintain a satisfactory standard of living
  • To determine the maximum daily working hours for all workers across different sectors that are operational in India
  • To get rid of labour legislation
  • To set strict punishment for employers who fail to provide promised wages to the workers
  • To convey the rights and responsibilities of all inspectors who are delegated the authority to enforce the provisions of this Act
  • To authorize the Indian Central Government on participating in the decision-making process alongside the individual state governments
  • To prevent the bosses from wrongfully interfering in the personal space of the employees
  • To set up rightful departments where any worker can seek redress when they become victimized by an employer who tends to pay less or delay pending payouts

Indian States that abide by the New Minimum Wages Act

The Central Government previously declared that the new rates will be effective from the beginning of the present financial year, i.e., April 1, 2022. In this regard, we have listed the Indian states who have decided to follow in their footsteps and incorporate the Act as an integral part of their legislature.

Indian states

& UTs

New Minimum Wages Act will be effective from:
Andhra Pradesh  April 1, 2022
Assam December 1, 2021
Andaman & Nicobar Islands January 1, 2022
Arunachal Pradesh April 1, 2016
Chandigarh April 1, 2022
Bihar April 1, 2022
Daman & Diu April 1, 2021
Chhattisgarh April 1, 2022
Dadra & Nagar Haveli April 1, 2021
Haryana January 1, 2022
Goa April 1, 2022
Delhi April 1, 2022
Gujarat April 1, 2022
Himachal Pradesh April 1, 2022
Karnataka April 1, 2022
Maharashtra January 1, 2022
Jharkhand April 1, 2022
Jammu & Kashmir November 1, 2017
Kerala May 1, 2022
Manipur December 27, 2016
Nagaland June 14, 2019
Mizoram April 1, 2016
Madhya Pradesh April 1, 2022
Punjab September 1, 2020
West Bengal July 1, 2022
Meghalaya April 1, 2022
Odisha April 1, 2022
Rajasthan July 1, 2021
Uttarakhand April 1, 2022
Tripura April 1, 2022
Puducherry January 1, 2020
Sikkim July 1, 2017
Tamil Nadu April 1, 2022
Uttar Pradesh April 1, 2022
Telengana April 1, 2022

Authorization of fixing minimum wage rates 

The concerned state Government fixes the minimum wages payable to each worker employed in a scheduled hub. The declaration is published through a notification on the official portal under Section 27 of the Act.

For workers associated with unemployment, the appropriate government fixes minimum wages under the same clause for the entire state or at times particular segments of the state. Review windows are decided as and when needed, there is no predetermined guideline regarding fixing such revision dates. The responsible government is entrusted with the following duties:

  • Fixing a minimum wage for time-oriented tasks (also referred to as ‘minimum time rate’)
  • Fixing a minimum remuneration for a single workpiece (this is also known as ‘minimum piece rate’)
  • Fixing a minimum supporting wage that is applicable to workers actively participating in piece work. The purpose is to secure these professionals a promised return generated from a time work model. Experts refer to this methodology as a ‘guaranteed time rate’.

Central Advisory Board

To fix the revised rates of wages that are to be disbursed to the workers, the Central Government appoints a counselling committee referred to as the Central Advisory Council. This bench of members includes:

  • Members elected by the Indian Central Government including employees and employers who represent the scheduled employment. The proportion of both parties must be equal.
  • Independent entities not surpass 1/3rd of the Board’s members. The Chairperson has to be one such member.

Applicability of the New Minimum Wages Act

This Act is put into action to stop employers from exploiting the recruited members of the organization in terms of the inadequate wage structure. No establishment is exempt from this Act; this covers all the factories/manufacturing hubs, business offices and similar industrial sectors. 

The only firms that are not withheld in this respect are the unscheduled workplaces. Each state vividly defines the sectors that are to be considered eligible for the minimum wage rule during every revision cycle. 

Results of Non-Compliance

Refraining to pay the minimum wage or nonpayment of monthly dues is held as a punishable offence as declared by the Indian Central Act. Resorting to such action usually leads to both monetary compensation and imprisonment. The guilty party can be fined an amount of 10000/- along with up to 5 years of confinement. 

Conclusion:-

The Act looks after the interests of the Indian labour community and aims to offer adequate employment opportunities to each honest worker so that they may earn a decent remuneration. Advisory councils and committees are set up where the concerned people reach out regarding issues related to non-payment or delayed payouts. 

Vakilsearch has prepared this article based on data collected from official sources; if you want to enjoy this type of law-based blog consider visiting our page on a daily note.

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