How the minimum wages are fixed? Are they fixed by the central govt or are a suject matter of the state govt?
31st October 2018 From India, Ghaziabad
Dear Member,
In general the fixation/revision of Minimum Wages is the done for a certain period under the Minimum Wages Act, 1948 by the “Appropriate Govt” on basis of the hike in Consumer Price Index Number during certain period. The Index number of base year notified accordingly the difference of Average of Consumer Price Index Number calculated and the MW revised.
However, the above is basic point, different states have different pattern. Moreover in some states same is done on basis of nature of employment or places as well.
Like in Delhi some factors have been fixed for different kind of employments (US, SS, S) than the Average hike is multiplied by the factor and accordingly MW revised. It is common for all employments and all places. Whereas in Maharashtra different rates applicable on basis of three area categories (Area A, B & C).
In UP the % of hike is determined accordingly DA is revised. In UP some industries are defined in the Notification.
However, the “Appropriate Govt” can either be the “Central Govt” or the “State Govt”. That depends upon the working/registration/Jurisdiction status of the establishment. For example, if you are registered under Shops and Establishment Act, and working/trading independently in a state than the “State Govt”MW will be applicable, but in case you take any contract for supplying manpower / doing job work for an establishment which comes under “Central Govt” than the MW as defined by the “Central Govt” in the states will be applicable.
Hope the above will help to clear your doubts. For any specific query pls share the detail.
Fellow members can throw more light on the matter.
1st November 2018 From India, Delhi
Thankyou for sharing information.
1st November 2018 From India, Ghaziabad
Dear madam,
What the learned Colleague has attempted to clarify mainly is the method of computing the variable special allowance( Dearness Allowance ) under the Minimum Wages Act.
Your query was how the minimum wages are fixed under the Act.
The minimum wages under the Act has two components 1 Basic wages and 2 Special Allowance.
For fixing minimum wages for the scheduled employments as selected by the Appropriate Govt the govt appoints Committee to recommend minimum wages for the selected industry/employment for different skill levels/ categories of jobs including fixation and computation of periodic variable DA component ( Special Allowance ).
The govt may accept the recommendations of the committee or can reject the same.
For more details please refer to the Act and state rules.
Vinayak Nagarkar
HR- Consultant.
7th November 2018 From India, Mumbai
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