Minimum Wages Act 1948

  • Blog|Indian Acts|
  • 2 Min Read
  • By Taxmann
  • |
  • Last Updated on 14 April, 2021
Minimum Wages Act was first enacted by the Central Legislative Assembly in the year a 1948. The primary intention behind this Act was to bridge the wage disparity between different work personals in an employment.  This Act fixes the minimum rates of wage in certain types of employments. That is, the wage paid for the work done should not be lesser than the amount suggested by the Act. 

The Objective of Minimum Wages Act 1948:

The primary objective of this Act is to ensure that every worker is paid the minimum amount of wage prescribed for the particular job. This, in turn, reduces the chances of workers getting exploited in the hands of their employers. As per the Act, Government has to take the steps to fix the minimum wage rates and revise the same at the interval of every five years. Also, it has the power to appoint advisory committees to provide just representation of the employers as well as employees. 

Minimum Wages Act Applicability

The provisions of the Minimum Wages Act are applicable on every employment that employs more than 1000 personnel in a State. Also, it is applicable on all the States of India, except Jammu & Kashmir.  Unless specifically consented by the Central Government, the provisions of this Act are not applicable on the employees of the undertaking owned by the Central Government or Railways.

Definition of Wages as per Minimum Wages Act 1948:

The Section 2 of the Act defines the ‘wages’ as remuneration that is capable of being represented in form of money. This may include the House Rent Allowance, but would exclude the amount paid as the value of house accommodation, supply of water, electricity and medical, travelling allowance, contribution to pension fund, provident fund or insurance, gratuity, or any other special expenses paid by the employer.

Fixing of Minimum Rates of Wages: 

(1) The minimum rate of wages fixed or revised by the appropriate Government in respect of scheduled employments under section 3 may consist of—

    1.  a basic rate of wages and a special allowance at a rate to be adjusted with the variation in the cost of living index number applicable to such workers (hereinafter referred to as the “cost of living allowance”); or
    2. a basic rate of wages with or without the cost of living allowance, and the cash value of the concessions in respect of supplies of essential commodities at concessional rates or
    3. an all-inclusive rate allowing for the basic rate, the cost of living allowance and the cash value of the concessions, if any.

(2) The cost of living allowance and the cash value of the concessions in respect of supplies of essential commodities at concessional rates shall be computed by the competent authority at such intervals and in accordance with such directions as may be specified or given by the appropriate Government.  

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Author Bio: Priyanka Bhattacharya – She has been a Marketing Communication professional for over 5 years. Her education background in Corporate Laws enables her to write in-depth articles on Taxes & Laws.   

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2 thoughts on “Minimum Wages Act 1948”

  1. Thanks for the explanation under the Minimum Wages Act, 1948. However, as per my experience and reading of the said Act, it is applicable even if employee strength is 1 or more instead of 1000.
    Please clarify.
    Kailash Nahak
    M – 99 99 99 82 03

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