Minimum wage by Samidha Hegde@Lexcliq


Minimum Wages as envisioned by the International Labour Organization (ILO), refers to the

“Minimum amount of remuneration that an employer is required to pay to wage earners for the work performed during a given period, which cannot be reduced by collective agreement or an individual contract.” 

Its purpose is to protect workers against exploitation due to disproportionality of the payment to the amount and character of the work done. Minimum wages are a key element of any government’s wage policy and generally operate to find a balance between socio-economic objectives and industrial growth. In addition to the prevention of exploitation, a minimum wage policy should also aim to regularize employment and shift unorganized classes of the workforce into more formal modes of employment.

The term Minimum Wage has not been defined in the Minimum Wages Act, 1948. The minimum wage is the lowest wage in the scale below which the efficiency of a worker is likely to be inspired. The minimum wage includes not only the bare physical necessities but also a modicum of comfort otherwise known as conventional necessities. The Minimum wages must, therefore, provide not merely for the bare subsistence of life but also for the preservation of the efficiency of the worker. For this purpose, the minimum wage must also provide for the same measure of education, medical requirements, and amenities.

Constituents or Components of Minimum Wage

According to Section 4 of the said Act, (Minimum Wages Act, 1948) consists of the following:

(1) Any minimum rate of wages fixed or revised by the appropriate government in respect of scheduled employments under section 3 may consist of:
(i) a basic rate of wages and a special allowance at a rate to be adjusted at such intervals and in such manner as the appropriate government may direct to- accord as nearly as practicable with the variation in the cost of living index number applicable to such workers;
(ii) a basic rate of wages with or without the cost of living allowance and the cash value of the concessions in respect of suppliers of essential commodities at concession rates where so authorized; or-
(iii) an all-inclusive rate allowing for the basic rate the cost of living allowance and the cash value of the concessions if any.

The cost of living allowance and the cash value of the concessions in respect of supplies of essential commodities at concession rate shall be computed by the competent authority at such intervals and in accordance with such directions as may be specified or given by the appropriate government.



The Minimum Wages Act has been passed for the benefits of workers. It came into existence to secure and for the welfare of workers in competitive market by providing minimum wages in certain employment. It empowers the Central And State Government to fix the minimum wage in certain employments to prevent the exploitation of labourers or unprivileged class of labours. The objectives of are:

  1. To allot Fixed of minimum wages in schedule employment.
  2. Empowers the Government to take steps regarding fixation of wages and to revise      them in every five years.
  3. To prevent exploitation of workers.
  4. To provide appointment of Advisory Committee and boards having equal number of representatives of both employers and workers.
  5. To apply this law to the majority in organized sector.




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