Will The New Code On Minimum Wages Empower The Workers?

The central government has invited public comments on Wages (Central) Rules, 2019. These rules, notified by the Union Ministry of Labour, are a part of the Code on Wages Act, 2019.

The Code on Wages Bill, 2019 was passed by Parliament in August 2018, and has already become an act. The draft rules propose to give minimum wages to all workers across the country, instead of a set of industries.

The draft rule will be finalized in December, 2019 after it receives public comments for a month.

Key Proposals of the Wages (Central) Rules, 2019

  • The country will be divided into three geographic categories.
  • These three areas will be: i. Metropolitan area with a population of 40 lakh or more, ii. non-metropolitan area with a population of 10-40 lakh, and iii. rural areas – to set the minimum wage
  • House rent will be 10% of the minimum wage
  • Expenditure on fuel, electricity and miscellaneous items will constitute at 20% of the minimum wage.
  • While calculating the wage, an intake of 2,700 calories per day and 66 metres of clothing per annum for a standard family will be taken into account.

Remember This: These proposals were part of the first minimum wage calculation done in 1957.

Code on Wages Bill, 2019

The Code replaces the following four laws:

  • the Payment of Wages Act, 1936,
  • the Minimum Wages Act, 1948,
  • the Payment of Bonus Act, 1965, and
  • the Equal Remuneration Act, 1976.

Read More Here .

UPSC Prelims Pointers

  • The government has decided to accept in toto the Supreme Court’s advisory in a ruling in 1992, popularly known as the Raptakos judgment.
  • It has also accepted the recommendations of the 15th Indian Labour Conference (ILC) made in 1957.

Do You Know?

According to the SC advisory of 1952, minimum wages for workers are to be fixed in a manner that 25 per cent of it constitutes “expenditure for children education, medical requirement, recreation and expenditure on contingencies.”


Once the proposed rules become effective, it will be a landmark moment for the country, for the way minimum wages will be prescribed is going to be quite different from the current practice.

According to the rules minimum wages will be fixed in such a way that it could cover cost of workers’ family on children education, medical requirements and recreation. This will remove arbitrariness.

What a Minimum Wage Must Do

Article 23 of the Indian Constitution relates to the fundamental right against forced labour and directs the state to promote a decent standard of work.

In 1948, Parliament enacted the Minimum Wages Act and the Fair Wages Committee the next year first recognized that a minimum wage should not only be enough for “bare sustenance,” but must also provide for “a measure of frugal comfort… requirements of essential social needs, and a measure of insurance against the more important misfortunes including old age”.

Read More Here.

Additional Reading For UPSC Prelims & Mains

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