The procedure for fixing minimum wages in India under the Minimum Wages Act, 1948 involves several steps and considerations. Here’s a general outline of the process:
- Constitution of Minimum Wage Advisory Board: The appropriate government (either the central government or the state government) establishes a Minimum Wage Advisory Board consisting of representatives from employers, employees, and independent experts. This board advises the government on various aspects related to minimum wages, including the fixation and revision of wage rates.
- Gathering Data and Conducting Surveys: The advisory board gathers data and conducts surveys to assess various factors influencing wage rates, such as the cost of living, prevailing wage rates in similar employments, standard of living, skill levels, and productivity levels.
- Consultation and Public Hearings: The advisory board holds consultations with stakeholders, including employers’ associations, trade unions, and other relevant parties. Public hearings may also be conducted to gather inputs and feedback from the general public.
- Determining Components of Minimum Wage: The advisory board determines the components of the minimum wage, which may include a basic wage rate and additional allowances or benefits such as housing, medical, and transportation allowances.
- Factors Considered for Fixation: The advisory board takes into account various factors while fixing minimum wages, including the nature of the work, skill levels required, geographical location, cost of living, inflation, prevailing wage rates, and the capacity of employers to pay.
- Revision of Minimum Wages: Periodically, the advisory board reviews and revises the minimum wage rates to keep pace with changes in economic conditions, inflation, and other relevant factors.
- Notification by the Government: Based on the recommendations of the advisory board, the appropriate government issues notifications specifying the minimum wage rates for different categories of workers in various employments.
- Enforcement and Compliance: Once the minimum wage rates are notified, it becomes mandatory for employers to pay wages to workers not less than the prescribed rates. Government authorities, such as labor inspectors, ensure compliance with the minimum wage laws and take action against employers found violating the provisions.
- Appeal Process: The Act provides for an appeal process whereby aggrieved parties can challenge the fixation of minimum wages before the appropriate authority.
It’s important to note that the exact procedure for fixing minimum wages may vary slightly between different states in India, as the Minimum Wages Act allows states to have their own rules and regulations regarding minimum wages.