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Unit 9: Minimum Wages Act, 1948

In a labour surplus economy like India wages couldn’t be left to be determined entirely by Notes
forces of demand and supply as it would lead to the fixation of wages at a very low level
resulting in exploitation of less privileged class. Keeping this in view, the Government of India
enacted the Minimum Wages Act, 1948. The purpose of the Act is to provide that no employer
shall pay to workers in certain categories of employments wages at a rate less than the minimum
wage prescribed by notification under the Act. The Act provides for fixation/periodic revision
of minimum wages in employments where the labour is vulnerable to exploitation. Under the
Act, the appropriate Government, both Central and State can fix/revise the minimum wages in
such scheduled employments falling in their respective jurisdiction.
The term Minimum Wage Fixation implies the fixation of the rate or rates of minimum wages
by a process or by invoking the authority of the State. Minimum wage consists of a basic wage
and an allowance linked to the cost of living index and is to be paid in cash, though payment of
wages fully in kind or partly in kind may be allowed in certain cases. The statutory minimum
wages has the force of law and it becomes obligatory on the part of the employers not to pay
below the prescribed minimum wage to its employees. The obligation of the employer to pay
the said wage is absolute. The process helps the employees in getting fair and reasonable wages
more particularly in the unorganised sector and eliminates exploitation of labour to a large
extent. This ensures rapid growth and equitable distribution of the national income thereby
ensuring sound development of the national economy.

It has been the constant endeavour of the Government to ensure minimum rates of wages to the
workers in the sweated industries and which has been sought to be achieved through the fixation
of minimum wages, which is to be the only solution to this problem.

9.1 Object and Scope of the Act

The Minimum Wages Act was passed in 1948 and it came into force on 15th March, 1948. The
National Commission on Labour has described the passing of the Act as landmark in the history
of labour legislation in the country. The philosophy of the Minimum Wages Act and its significance
in the context of conditions in India has been explained by the Supreme Court in Unichoyi v. State
of Kerala (AIR 1962 SC 12), as follows:
According to its preamble the Minimum Wages Act, 1948, is an Act to provide for fixing minimum
rates of wages in certain employments. The employments are those which are included in the
schedule and are referred to as Scheduled Employments‘. The Act extends to whole of India.
The Minimum Wages Act, 1948 is a land mark in the history of labour legislation in the country.
In a country like ours where the number of unemployed persons is very large, the legislators
realized that if the rule of market is allowed to prevail, it could be difficult to prevent sweating
or exploitation of labour through payment of unduly low wage. It was to prevent this position
that the Act was enacted and specific provisions were made for determining minimum wages in
respect of the scheduled employments.
Once a minimum wages is fixed according to the provisions of the Minimum Wages Act, it is not
open to the employer to plead his inability to pay the said wages to his employees. In other
words, once the minimum wage is determined under the Act, the obligation of the employer to
pay the said wage is absolute. The appropriate Government under the Act can fix minimum
rates of wages payable to employees employed in the employments included in schedule I and
schedule II. Here, the appropriate Government means the Central or the State Government as
specified in the Act.

The appropriate Government has also been empowered to include any employment in the
schedules. The original schedule contains 19 employments. The West Bengal Government has so
far included 42 employments in the schedule.

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