Variation in Minimum Wages in Different States

The Union Labour & Employment Minister Shri Mallikarjun Kharge has informed the Rajya Sabha that the norms recommended by the Indian Labour Conference (ILC), held in 1957 are taken into account while fixing the minimum wages. These are as follows: -

a) 3 consumption units for one earner.

b) Minimum food requirements of 2700 calories per average Indian adult.

c) Clothing requirements of 72 yards per annum per family.

d) Rent corresponding to the minimum area provided for under Government’s Industrial Housing Scheme.

e) Fuel, Lighting and other miscellaneous items of expe nditure to constitute 20% of the total minimum wage.

Subsequently the Hon’ble Supreme Court delivered a judgement in the case of Reptakos& Co. Vs. its workers that the children’s education, medical requirement, minimum recreation including festivals/ceremonies, provision for old age, marriage etc. should constitute 25% of the minimum wage and used as a guide in fixation of minimum wages. The State Governments have been requested from time to time to keep the above norms and judicial pronouncement in view while fixing/revising the minimum wages.

The variation of minimum wages between the States is due to differences in socio-economic and agro-climatic conditions, prices of essential commodities, paying capacity, productivity and local conditions influencing the wage rate. The regional disparity in minimum wages is also attributed to the fact that both the Central and State Governments are the appropriate Government to fix, revise and enforce minimum wages in scheduled employments in their respective jurisdictions under the Act.

The recently held 44th Indian Labour Conference, inter alia, discussed the issue of amendment of the Minimum Wages Act and made certain recommendations for incorporation in the amendment proposals. The recommendations were mainly on national minimum wage, enhancement of penal provisions, adoption of VDA in all States/UTs, etc. The details of the recommendations are given in Annexure- I.

The Minister was replying to a written question in this regard.

Annexure-I

                A Conference Committee of the 44th session of ILC was constituted to discuss Agenda Item No.(i) concerning Minimum Wages and related issues. These issues, inter alia, include norms for fixation/revision of minimum rates of wages, Variable Dearness Allowance(VDA), National Floor Level Minimum Wages etc. On the basis of detailed discussion, the following points emerged.

1.             There was broad consensus that the Government may fix minimum wages as per the norms/ criteria recommended by the 15th ILC (1957) and the directions of the Hon’ble Supreme Court (Reptakos& Co. Vs. its workers Union) 1992. The Government may take necessary steps accordingly.

2.             It was suggested that the Minimum Wages Act should cover all employments and the existing restriction for its applicability on the scheduled employments only should be deleted. This will also help India ratify ILO Convention No.131.

3.             It was broadly agreed that there should be national minimum wages applicable to all employments throughout the country.

4.             It was pointed out that the payment to the apprentices should be treated differently from the other categories.
5.             The Committee noted that at present there are 12 States/UTs who have not adopted VDA. There was consensus that all States/UTs should adopt VDA.

6.             It was also recommended that the payment of minimum wages should be done through Banks/Post Offices etc.

7. It was felt that the enforcing agencies should not be given the power of adjudication and, therefore, this proposal should be re-examined.

8.             Regarding penal provision for violation of the Act, it was felt that imprisonment clause under Section 22 and 22A is harsh to the employer and may be re-examined. Further, it was felt that non-maintenance of registers should not attract imprisonment.

9.             The proposal of paying different minimum wages in respect of same employment either in the Centre or in the States should be done away with.

Source : PIB Release, March 14, 2012