M.W.Act- FAQ

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FAQ under Minimum Wages Act, 1948 Question Answer Why was the Minimum Wages Act, 1948 enacted? The Minimum Wages Act, 1948 was enacted primarily to safeguard the interests of the workers vulnerable to exploitation due to lack of bargaining power. Enactment of the MW Act aimed at ensuring decent minimum wages to workers and thus protecting them from exploitation. All provisions of the Act are gender- neutral i.e. non- discriminatory. What does the term “wages” mean under Section 2(h) of the Minimum Wages Act, 1948? Under the Section 2(H) wages is defined: “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 employment in respect of his employment or of work done in such employment, [and includes house rent allowances] but does not include i. The value of- (a) Any house- accommodation, supply of light, water, medical attendance, or (b) Any other amenity or nay 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 expense entailed on him by the nature of his employment ; or v. Any gratuity payable o discharge; Who Fixes the Minimum Wages under the Minimum Wages Act, 1948? Does the Minimum Wages Act, 1948 apply to all types of employment? Section 3(1)(a) empowers the appropriate government (both Central and State) to fix minimum rates of wages for employees employed in scheduled employments, i.e., those listed in Part 1 and Part II of the Schedule of the Act or added via notification under Section 27. What is meant by “appropriate government’ under Section 2(b) of the Minimum Wages Act, 1948 and how is it determined? Section 2(b) of the Minimum Wages Act, 1948 defies the appropriate government as :- “appropriate government” means-  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 establishment by a Central Act, the Central Government.  In relation to any scheduled employment, the State Government. How frequently is the appropriate government required to review/revise the minimum wages fixed the minimum wages fixed the minimum wages fixed for scheduled employments? Section 3(1)(b) of the Minimum Wages Act, 1948 provides that the appropriate government review at such intervals, as it may think fit, such intervals not exceeding five years, the minimum rates of wages so fixed and revise the minimum rates, if necessary. Can employment listed in the Schedules of the Minimum Wages Ac, 1948 be amended or added to? If yes, who shall be the Authority to do so? Yes, Under Section 27 of the Minimum Wages Act, 1948, the Appropriate Government is empowered to add any employment to the Schedules by issuing a notification in the Official Gazette. Once added, the minimum wage provisions of the Act become applicable to those employments. What are the types of minimum rates of wages that can be fixed by the appropriate government? Under the Section 3(2) of the Minimum Wages Act, 1948, the Appropriate Government may fix:  A minimum rate of wages for time work.  A minimum rate of wages for piece work.  A minimum rate of remuneration to apply in the case of employees employed on piece work for the purpose of securing to such employees a minimum rate of wages on a time work basis.  A minimum rate (whether a time rate or a piece rate) to apply in substation for the minimum rate which would otherwise be applicable, in respect of overtime work done by employees. What are the components of the minimum rate of wages? As per Section 4 of the Act: 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 (cost of living allowance) at 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: or ii. A basic rate of wages with or without the cost of living allowance, and the cash value of the concessions in respect of supplies of essential commodities at concessional 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. (2) The cost of living allowance and the case value of the concessions in respect of supplies of essential commodities at concessional rates shall be computed by the competent authority at such intervals and in accordance with such directions as may be specifies or given by the appropriate Government. Can the appropriate government; a. Fix different rates of minimum wages for different workers or types or types of work, and b. Can these wages be fixed by one or more wage periods under the Minimum Wages Act, 1948? Under Section 3(3), the appropriate government may fix/revise: (a) different minimum rates of wages may be fixed for i. different scheduled employments; ii. different classes of work in the same scheduled employment; iii. adults, adolescents, children and apprentices; iv. different localities; (b) minimum rates of wages may be fixed by any one or more of the following wage periods, namely: i. by the hour, ii. by the day, iii.by the month, or iv.by such other larger wage period as may be prescribed; and where such rates are fixed by the day or by the month 'the manner of calculating wages for a month or for a day, as the case may be, may be indicated. Can an employer pay wages less than the minimum wages to an employee employed in a scheduled employment under the Minimum Wages Act, 1948? No. Under Section 12 of the Act, where in respect of any scheduled employment a minimum rate of wages is fixed, the employer shall pay to every employee engaged in a scheduled employment under him wages at a rate not less than the minimum rate of wages fixed for that class of employees in that employment. What are provisions related to number of working hours, rest day etc. under the Minimum Wages Act, 1948 Where Minimum rate of wages has been fixed for a Scheduled Employment by the Appropriate Government, it may: (a) fix the number of hours of work which shall constitute a normal working day, inclusive of one or more specified intervals: (b) provide for a day of rest in every period of seven days which shall be allowed to all employees or to any specified class of employees and f or the payment of remuneration in respect of such day of rest; (c) provide for payment for work on a day of rest at a rate not less than the overtime rate. [Section 13(1)] Are there any exceptions to the rules regarding normal working hours and rest days under Section 13 of the Minimum Wages Act, 1948? Yes. In relation to the following classes of employees, Section 13 (1) applies only to such extent and subject to such conditions as may be prescribed: a. employees engaged on urgent work, or in any emergency which could not have been foreseen or prevented; b. employees engaged in work in the nature of preparatory or complementary work which must necessarily be carried on outside the limits laid down for the general working in the employment concerned; C. employees whose employment is essentially intermittent; d. employees engaged-in any work which for technical reasons has to be completed before the duty is over; e. employees engaged in a work which could not be carried on except at times dependent on the irregular action of natural forces. [Section 13(2)] What are the provisions related to payment of wages for overtime work and for workers who work less than the normal working day under the Minimum Wages Act, 1948? For Overtime: Section 14(1) of the Act states “Where an employee, whose minimum rate of wages is fixed under this Act, works on any day in excess of the number of hours constituting a normal working day, the employer shall pay him for every hour or for part of an hour so worked in excess at the overtime rate fixed under this Act or under any law of the appropriate Government for the time being in force, whichever is higher”. Wages of Worker who works for less than working day:- Where an employee whose minimum rate of wages has been fixed under this Act by the day, works on any day on which he was employed for a period less than the requisite number of hours constituting a normal working day, he shall, save as otherwise hereinafter provided, be entitled to receive wages in respect of work done by him on that day as if he had worked for a full normal working day: Provided, however, that he shall not be entitled to receive wages for a full normal working day- i. in any case where his failure to work is caused by his unwillingness to work and not by the omission of the employer to provide him with work, and ii. in such other cases and circumstances as may be prescribed. (Section 15) How should wages be calculated employee when an performs multiple classes of work with different minimum wage rates? Where an employee does two or more classes of work to each of which a different minimum rate of wages is applicable, the employer shall pay to such employee in respect of the time respectively occupied in each such class of work, wages at not less than the minimum rate in- force in respect of each such class. (Section 16) What wages are payable when an employee is engaged in piece work but only a minimum time rate is fixed? Where an employee is engaged in piece work and no minimum piece rate has been fixed, but a minimum time rate has been prescribed under the Act, the employer shall pay wages to such employee at not less than the applicable minimum time rate, irrespective of the quantity of work completed. (Section 17) Who is the authority to hear and decide claims if a worker is paid less than the minimum wages or not paid for overtime or rest days? Who appoints this authority, and what is the time limit for filing a complaint? Under Section 20 of the Act, the Appropriate Government may, by notification in the official Gazette, appoint any:  Commissioner for Workmen’s Compensation or any officer of the Central Government exercising functions as a Labour Commissioner for any region,  Or any officer of the State Government not below the rank of Labour Commissioner or any] other officer with experience as a Judge of a Civil Court or as a stipend ay Magistrate to be the Authority to hear and decide for any specified area all claims arising out of: Payment of less than the minimum rates of wages or in respect of the payment of remuneration for days of rest or for work done on such days or of wages at the overtime to employees or paid in that area. Every such application shall be presented within 6 months from the date on which the minimum wages [or other amount] became payable: Further the application may be admitted after the said period of 6 months when the applicant satisfies the Authority that he had sufficient cause for not making the application within such period. What powers does the Authority have to decide and enforce such claims? Under Section 20(3) When any application under sub-section(2) is entertained, the Authority shall hear the applicant and the employer, or give them an opportunity of being heard, and after such further inquiry, if any, as it may consider necessary, may, without prejudice to any other penalty to which the employer may be liable under this At, direct- i. In the case of a claim arising out of payment of less than the minimum rates of wages, the payment to the employee of the amount by which the minimum wages payable to him exceed the amount actually paid, together with the payment of such compensation as the Authority may think fit, not exceeding ten times the amount of such excess; ii. In any other case, the payment of the amount due to the employee, together with the payment o such compensation as the Authority may think fit, not exceeding ten rupees, And the Authority may direct payment of such compensation in cases where the excess or the amount due is paid by the employer to the employee before the disposal of the application. (4) If the Authority hearing nay application under this section is satisfies that it was either malicious or vexatious, it may direct that a penalty not exceeding fifty rupees be paid to the employer by the person presenting the application. What are the penalties for violating the provisions of the Minimum Wages Act, 1948? Under Section 22, if any employer- a. Underpays employees (i.e. less than the minimum wages), or less than the amount sue to him under the provisions of this Act, or b. Contravenes any rule or order made under Section 13, shall be punishable with ‘Imprisonment up to 6 months, or fine up to 500 rupees, or with both: Provided the Court may take into consideration any compensation already awarded. 2. Any employer, who violates any provision, rule, or order of this Act, where no specific penalty is provided, shall be liable to fine up to Rs. 500. [Section 22A] 3. Of the offence is committed by a company, every person responsible for the conduct of business for that company shall be deemed guilty and be liable to be proceeded against except when the offence was committed without his knowledge or that he exercised all sue diligence to prevent such offence. And any director, manager, secretary, or officer whose consent, connivance, or negligence caused the offence is also deemed guilty and liable. [Section 22C]. Can an employee agree to receive less that the minimum wage fixed under the Minimum Wages Act, 1948? No. Under Section 25 of the Minimum Wages Act, 1948, any contract or agreement-whether made before or after the Act cam inti force- where an employee agrees to accept wages lower than the minimum rate fixed by law is null and void.