The concept of minimum wages lies at the heart of labour welfare jurisprudence in India. It reflects the constitutional commitment to social justice by ensuring that workers are paid wages that enable them to live with dignity and maintain their efficiency as productive members of society. With the enactment of the Code on Wages, 2019 (“Code”) the legislature sought to consolidate and rationalise India’s wage related laws, replacing multiple overlapping enactments with a single, comprehensive framework.
The Code introduces a uniform statutory architecture governing minimum wages across all employments, sectors and classes of workers while simultaneously strengthening the principles of non discrimination and fair remuneration. By empowering governments to fix minimum wages based on skill levels, geographical considerations and the nature of work and by introducing the concept of a national floor wage, the Code marks a significant shift from fragmented wage regulation to a harmonised and inclusive regime.
Is gender based wage discrimination allowed?
No. There shall be no discrimination on the grounds of gender in matters relating to wages for the same work or work of a similar nature.
Can an employer reduce wages to comply with gender equality?
No. An employer cannot reduce the wages of any employee to achieve compliance.
Is discrimination allowed at the recruitment stage?
No. Discrimination on the ground of sex in recruitment or conditions of employment is prohibited except where employment of women is restricted by law.
Who decides disputes about whether work is the same or similar?
Such disputes are decided by the authority notified by the appropriate Government.
Can an employer pay wages below the minimum wage?
No. No employer shall pay wages less than the notified minimum rate.
Who fixes minimum wages?
The appropriate Government fixes minimum wages.
On what basis are minimum wages fixed?
They may be fixed for time work or piece work and piece work wages must ensure minimum time based wages.
In what wage periods can minimum wages be fixed?
They may be fixed by the hour, day, or month.
What factors are considered while fixing minimum wages?
Skill level, geographical area, arduousness of work, hazardous nature, underground work and prescribed norms.
Should the number of minimum wage rates be many?
No. They should be kept at a minimum as far as possible.
What does minimum wage conceptually ensure?
It ensures sustenance of the worker and family and preservation of the worker’s efficiency.
What can minimum wages consist of?
They may consist of basic wages plus cost of living allowance, basic wages with concessions or an all inclusive rate.
Who computes cost of living allowance?
An authority appointed by the appropriate Government.
How are minimum wages fixed or revised?
Either by appointing committees or by publishing proposals for public consideration.
Who are represented in committees?
Employers, employees in equal numbers and independent persons.
When do revised wages come into effect?
Usually three months after notification.
How often must minimum wages be reviewed?
Ordinarily every five years.
Can the Government alter employment contracts while fixing minimum wages?
No. It can only fix or revise minimum wages, not alter contractual terms.
Can workers be reclassified based on experience by notification?
No. Such reclassification is beyond Government jurisdiction.
Are supervisory or inspector roles covered automatically?
No, if they do not fall within the definition of employee.
Are unpaid trainees covered?
No. Unpaid trainees and fixed training periods imposed by Government are impermissible.
Are contract workers covered?
Yes. Contract workers are covered equally.
Can wages be artificially split into allowances?
No. Such segregation is impermissible.
What is a floor wage?
It is a wage fixed by the Central Government considering minimum living standards.
Can minimum wages be below the floor wage?
No.
Can existing higher wages be reduced?
No.
Who is consulted before fixing floor wages?
Advisory Boards and State Governments.
Is a worker entitled to full wages if he works less hours?
Yes, unless the failure is due to unwillingness or prescribed exceptions.
How are wages paid if an employee does multiple types of work?
Wages must be paid according to the applicable minimum rate for each type of work.
What if only time-based minimum wages are fixed?
The employee must be paid at least the minimum time rate.
Can the Government fix working hours?
Yes, including rest days and overtime for rest days.
Are exceptions allowed?
Yes, for emergencies, intermittent work, preparatory work, technical work and work dependent on natural forces.
When is work considered intermittent?
When declared so by the Government due to periods of inaction during duty hours.
Is overtime payable?
Yes. Overtime must be paid at not less than twice the normal rate.
The minimum wage framework under the Code represents a decisive step towards simplifying wage regulation while reinforcing worker protection in a rapidly evolving labour market. By extending the applicability of minimum wages to all employments, introducing transparent procedures for fixation and revision and mandating periodic review, the Code seeks to balance economic realities with the imperative of social welfare. The introduction of a floor wage further ensures that no worker is paid below a nationally acceptable subsistence threshold irrespective of regional or sectoral variations. At the same time, judicial guidance continues to play a crucial role in ensuring that the exercise of wage fixing powers remains within statutory limits and does not encroach upon contractual autonomy or managerial prerogatives. As the Code transitions from legislation to lived reality, its success will ultimately depend on effective implementation, informed compliance by employers and robust enforcement by authorities. If applied in its true spirit, the minimum wage regime under the Code has the potential to advance the constitutional promise of fair wages and dignified work for millions of workers across India.
Muneeb Rashid Malik is an Advocate. He tweets @muneebmalikrash.