Revision in Minimum Wages by the Government of National Capital Territory of Delhi

Minimum wage is the level of income for workers to ensure a standard of living for them. It also aims to prevent the exploitation of workers. At present, the Minimum Wages Act, 1948 (‘the Act’) governs the fixation of the minimum wage in certain scheduled employments. The relevant State Government sets prescribed minimum wages for the State below which an employer cannot pay to its employees in scheduled employment.

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The wage rates in scheduled employment differ across states, sectors, skills and occupations based on various factors. Hence, there is no single uniform minimum wage rate across the country and the revision cycle differs for each state.

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On 8th August 2019,  parliament had passed the Code on Wages Act, 2019 (‘the Code’)  to replace four labour regulations – Minimum Wages Act, 1948, Payment of Wages Act, 1936,  Payment of Bonus Act, 1965 and Equal Remuneration Act, 1976. However, the effective date for implementation of the Code is yet to be notified by the Government, therefore, till such date, the Act will continue to govern minimum wages.

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Read Also: Clarification on Issues Relating to refund

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1.   Minimum rate of wages

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Any minimum rate of wages fixed or revised by the appropriate Government in respect of scheduled employments may consist of-

(i)       a basic rate of wages and a special allowance varying with the cost of living allowance; or

(ii)      a basic rate of wages with or without the cost of living allowance

(iii)     cash value of the concessions in respect of supplies of essential commodities at concessional rates, where so authorised; or

(iv)  inclusive rate allowing for the basic rate, the cost of living allowance and the cash value of the concessions, if any.

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Meaning of wages

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The term “wages” means all remuneration in money to be payable to a person employed in respect of his employment or of work done in such employment and includes house rent allowance.

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Wages do not include the following items-

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• the value of  any house-accommodation, supply of light, water, medical attendance; or

• the value of any other amenity or any service excluded by general or special order of the appropriate Government;

• any contribution paid by the employer to any pension fund or provident fund or under any scheme of social insurance;

• any travelling allowance or the value of any travelling concession;

• any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment; or

• any gratuity payable on discharge

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2.   Fixation of minimum wages

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The appropriate Government fixes the minimum wages payable to employees employed in scheduled employments and in employment added to either part. The rates may be fixed basis the number of hours worked, number of pieces made guaranteed time rate and overtime rate.

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3.   Revision of minimum wages

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All the minimum wages so fixed shall be reviewed by an appropriate Government after every five years.

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4.   Procedure for fixation and revision of minimum wages

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While fixing minimum rates of wages in respect of any scheduled employment for the first time or revising minimum rates of wages so fixed, appropriate Government can adopt any of the following two modes -

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(i) Appointing as many committees and subcommittees as it considers necessary to hold enquiries and advise it in respect of such fixation or revision, as the case may be, or

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(ii) By publishing its proposals in notification in the official gazette for the information of persons likely to be affected. In such notification, a date (not less than two months) shall be specified on which the proposals will be taken into consideration.

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5.   Revision of minimum wages in Delhi

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On 11^th November 2021, vide F.No.12 (142)/02/MW/VIII/Part file 4456, the Government of National Capital Territory of Delhi had revised the rates of minimum wages which shall be applicable w.e.f 1st October 2021. The revised rates in respect of unskilled, semiskilled, skilled and clerical and supervisory staff categories in all schedules employment are:

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6.   Minimum wages in a few other States

(i)                         Gujarat

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(ii)                     Maharashtra

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(iii)                  Haryana

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(iv)                   Rajasthan

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(v)                       Uttar Pradesh

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7.   Punishment for contravention

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Any employer who-

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(a) pays to any employee less than the minimum rates of wages fixed for that employee's class of work or less than the amount due to him under the provisions of this Act or

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(b) contravenes any rule or order made under section 13 relating to fixing working hours in the normal working day;

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can be punishable with imprisonment for a term which may extend to six months or with a fine which may extend to five hundred rupees or with both:

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The court shall take into consideration the amount of any compensation already awarded against the accused in any proceedings taken under section 20 while imposing any fine for an offence.