Is Our Housing Society Company Required to Pay Minimum Wages? Seeking Guidance on Legal Obligations

Dear Members, as I understand it, the Minimum Wages Act of 1948 applies only to "scheduled" employment as indicated in the schedule, which covers various categories of employment that have been notified from time to time by the competent authority under the Act. Although there are 66 such categories in Maharashtra in the list in respect of which the Labour Commissioner notifies basic wages and special allowances, obviously, no such list can be exhaustive.

My query concerns our organization, which is a company registered under the Companies Act, but whose shareholders are entitled to occupy the apartments owned by the company by virtue of the shares that they hold. Thus, the situation is slightly anomalous as the main object of the company is to acquire land and to construct residential complexes for the sole benefit of the company and its members while it functions basically as a housing society without the members having ownership of the apartments they occupy.

The issue is whether such an entity is covered by any statute that makes the payment of minimum wages mandatory. It stands to reason that, in principle, any entity must pay minimum wages to its employees in the interests of social justice, and no entity can get away by paying an arbitrary (and low) amount that does not allow the employee to keep body and soul together.

However, my query is regarding the statute that would apply to our organization. The Minimum Wages Act, although it mentions 66 categories, does not mention housing societies or, as in our case, companies providing housing to its members. We are not covered under the Shops and Establishment Act of 1948, as we are not "a shop, commercial establishment, residential hotel, restaurant, eating house, theatre or other place of public amusement or entertainment." We are also not a "factory" under the Factories Act of 1948.

I would be grateful if any of the members could provide guidance on the issues highlighted above.

With thanks in anticipation

When the organization is not covered under the Factory Act, it must be under the Shops and Establishment Act. The Shops and Establishment Act covers all categories that are not covered under the Factory Act. Anyway, mere housing for the directors is not an issue; the company can provide free accommodation to their shareholders, directors, or members after making a resolution in their board meeting.

As you have mentioned:

A housing society or AOP/BOI does not hold the company registration; company registration itself describes the status as a "corporate body."

To add to what I have posted above:

I have been reviewing the laws applicable to this issue. I found a notification by the Ministry of Labour & Employment for the central sphere, where minimum wages for two categories relevant to housing societies/housing complexes, namely, "sweeping and cleaning" and "watch and ward," have been notified. These could, therefore, appear to be scheduled employments under the Minimum Wages Act, 1948. Could someone please confirm this conclusion? Also, could someone explain what the "Central Sphere" is and whether the Government of India's notifications overrule/have precedence/apply over the State Government's list, particularly in this case where the State Government's list of scheduled employments is silent on this category?

Thanks again

Hi, going through the minimum wages notification. It states that the Shops and Establishment Act wages should be applied if the given employment is not in the schedule. The Co-operative Societies Act mentions that employees working to conduct the business of the society, meaning the operations of the society, should abide by minimum wages and EPF Act. Therefore, as per the applicable state minimum wages act and its schedule, it will be necessary to apply the Shops and ETD Schedule of Employment in such cases.