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The Minimum Wages Act, 1948ffice:office" />

Wage is nothing but the price of labour sold by labourers to employers. Its rate
is determined by the forces of demand & Supply in the market. Since supply of
labour is high in the Indian market and the rates are low, Government enacted
The Minimum Wages act to fix the minimum wage rate to be paid by the
employer.

The purposes of this act are:


To empower the government to fix or to revise minimum rates of wages in
the Scheduled Employments i.e. those employments that are listed in the
Schedule.
Wages to be paid in cash but where a part is paid in kind, government may
allow the continuance of such wages. Example of payment of wages in kind
includes agricultural products
Wage rates may be fixed on hourly, daily, monthly basis
Minimum rates of wages may differ from employment to employment, from
location to location and also amongst different classes of workmen (Adults,
children, adolescents)
It is one of the most flexible legislations and can be very seldom challenged in
the Court of Law.
There are two alternative procedures for fixing or revising minimum wage rate,
out of which the government can adopt any one.
Committee method: Under this method, Government forms a tripartite
committee of employers, employees and independent persons (mainly
Government officers). This committee examines the prevailing situation in
Industry and makes recommendations based on that. On receipt of such
recommendations, government fixes the minimum wage rate with or without
modifications.
Notification method: Under this method, the government itself suggests
the minimum rate of wages for an employment. It makes a proposal and gets it
notified in the official gazette for information of all concerned. After 2 months of

wait for any suggestions/recommendations by employments, government takes


up the proposal in light ofthe comments it receives and finalizes it
with/without modifications.
After the fixation or revision of minimum wage rate, it has to be published in
the official gazette.
An authority appointed by the Government called Payment of wages authority
will settle the claims made by employees.
Contracting out is not allowed in this Act also.
At this juncture, I would highlight certain points of difference between The
Payment of Wages Act, 1936 and TheMinimum Wages Act, 1948, which unless
made clear might create confusion in the minds of the readers.

THE MINIMUM WAGES ACT, 1948

THE PAYMENT OF WAGES ACT, 1936

Wage rate is fixed by government which can


be daily, weekly monthly

Wage rate is fixed by Collective Bargaining or


Industrial Tribunal or Wage Board

Nothing is mentioned about wage period in


the Act

Wage period is fixed by employer and can be


weekly, monthly etc.

The Act is applicable to Scheduled


employments only which is an unorganized
sector

The Act is applicable to all Industrial


establishments, which is an organized
sector.

Empowerment

Enactment

Both Cash & Kind payments

Only Cash payments

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