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FAQs

FAQ's

A curated and categorised database of common questions regarding the law.




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1 What is the object of the Minimum Wages Act, 1948?

The Minimum Wages Act was formulated to provide for fixing minimum rates of wages in certain employments. The Act also governs certain service conditions such as working hours, weekly rest days and payment of overtime for employees covered under the act.
2 To whom does the Minimum Wages Act apply ?

The Minimum Wages Act extends to whole of India and applies to all establishments employing one or more persons and engaged in any of scheduled employments. It covers every employee who is engaged in any scheduled employment, including an out worker to whom materials are given out for manufacturing or processing at his own premises. Please refer the schedule to the Act for list of Scheduled Employment
3 Is the Act applicable to daily rated and casual employees?

The Act is expected to fix the minimum wages in respect of employees whether they are casual, daily rated, temporary or permanent.
4 Who declares Minimum Wages

In India, minimum wages are declared by the Central Government for industries where the Central Government is the appropriate authority, and by each State for other industries
5 What components of Wages are included in calculating the Minimum Wage?

Wages is defined as all remuneration, capable of being expressed in terms of money, which would, if the terms of the contract of employment, express or implied, were fulfilled, be payable to a person employed in respect of his employment or of work done in such employment, and includes house rent allowance, but does not include-

(i) the value of-
(a) any house-accommodation, supply of light, water, medical attendance, or
(b) any other amenity or any service excluded by general or special order of the appropriate Government
(ii) any contribution paid by the employer to any Pension Fund or Provident Fund or under any scheme of social insurance
(iii) any travelling allowance or the value of any travelling concession
(iv) any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment
(v) any gratuity payable on discharge
6 Where Basic and DA are declared separately, do the wages have to be split up into Basic and DA ?

The minimum rate of wages fixed under the Act is remuneration payable to the worker as a gross amount, Neither There is no provision of the Act providing that the rate of minimum wages is to be split into basic wages and cost of living allowance even where these are declared separately in the notifications
7 Are the employees covered by the Act entitled to overtime wages?

Any employee covered who works for more than the prescribed number of hours in any day is entitled to wages at double the ordinary rate of wages.
8 How frequently is the minimum wages updated?

There is no prescribed or fixed frequency for revision of Minimum Wages. Earlier,revisions would be infrequent (between 1 and 3 years) but now, the centre and most states revise the minimum wages at least twice a year.
9 What happens if minimum wgae is updated retrospectively ?

Employees need to be paid arrears of minimum wages if their wages were below the revised minimum wage
10 We have our head office in State A and our employees are based at client sites in State B. Which states minimum wages would apply ?

Minimum Wages have to be paid as per the rate of the State in which the site is situated. If the site belongs to an industry where the Central Government is the appropriate government, then central minimum wages have to be paid.
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