Wage Fixation and Legal Interpretation

Wage fixation and legal interpretation– Minimum wage legislation is the main labor legislation for the workers in the unorganized sector. In India, the policy on wage determination had been to fix minimum wages in sweating employments and to promote fair wage agreements in the more organized industries. Wages in the organized sector are determined through negotiations and settlements between employers and employees. On the other hand, in the unorganized sector, where labor is vulnerable to exploitation due to illiteracy and does not have an effective bargaining power, the intervention of the government becomes necessary.

The Minimum Wage Act, 1948 provides for fixation and enforcement of minimum wages in respect of scheduled employments to prevent exploitation of labor through the payment of low wages. The objective of the Act is to ensure a minimum subsistence wage for the workers. The Act require the appropriate government to fix minimum rates of wages in respect of employment specified in the schedule and review and revise the rates of wages at intervals not exceeding five years. Once the minimum wages are fixed it is not allowed for the employer to plead his inability to pay the said wages to his employees.

The minimum wages may be fixed at,

• Time rate
• Piece rate
• Guaranteed time rate
• Overtime rate

The Act provides that different minimum wage rate may be fixed for,

• Different scheduled employments
• Different works in the same employment
• Adult, adolescent and children
• Different locations
• Male or female

Also minimum wages may be fixed by,

• Hour
• Day
• Month
• Other period as may be prescribed by the notified authority.

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