Confused About Minimum Wage Rules? Which Rate Applies When State and Central Differ?

Dear Seniors, we know that Central and State Governments issue notifications on revised minimum wages from time to time, which are to be followed by all as per the applicability. It is important to mention that I am working in the construction industry, which falls under the central government, and the central government's wage rate is applicable. As per my understanding, the minimum wage rate prescribed by either the central government or the state government, whichever is higher, should be applicable in my case.

Question on Minimum Wages Act

My question is whether it is stated in The Minimum Wages Act or any gazette notification that "whichever minimum wages are higher for the given period should be applied." Can anyone provide evidence for this regarding the applicability of wages if the organization falls under the central government and the state government's wage rate is higher than that of the central government?

Yours is an interesting case. The above is partially true; it is applicable only for Central Government rates. When the State Government rate is higher than the Central Government, then you are entitled to the higher rate. However, it will not be applicable if you are employed under the state government. In such a case, only the State Government rate will be applicable.

In regard to evidence, you can refer to Part III of the central government notification applicable to your industry/area. Part III is not mentioned with every notification. As per my record, it was last mentioned in the notification dated 19.07.2017.

Refer to Page 7, Part III "Explanation point 'B'," wherein it is clearly mentioned, "Where in any area the minimum rates of wages fixed by this notification are lower than the minimum rates of wages fixed by the State Government for the employees of the aforesaid employments in relation to which the State Government is the appropriate Government, the rates of wages fixed by the State Government shall, in respect of these areas, be deemed to be the minimum rates of wages payable under this notification."

Hope this will resolve your query.

Thank you for your valuable comment and the attached notification that specifies, "Where in any area the minimum rates of wages fixed by this notification are lower than the minimum rates of wages fixed by the State Government for the employees of the aforementioned employments in relation to which the State Government is the appropriate Government, the rates of wages fixed by the State Government shall, in respect of these areas, be deemed to be the minimum rates of wages payable under this notification."

Query Regarding Appropriate Government

I have a query regarding this. Since I am involved with a road construction organization executing a project for the Central Government, which falls under the purview of the central government, I believe the appropriate government is the Central Government. Please correct me if I am mistaken.

Regards, P. K. Singh

I think that Mr. Pan Singh has given you a clear answer to your original query. As per the explanation in the Minimum Wages notification issued by the Central Government, such a deeming provision applies only when the minimum wage rates for the employment fall below the rates fixed by the State Government for the same employment falling under its purview. It does not alter the appropriate Government for the employment.

Road construction and government roles

Road construction work is undertaken by the State Governments for their State Highways. Previously, national highways were also built and maintained by the respective State Governments with funds provided by the Centre. After the formation of NHAI, this work is directly undertaken by the Government of India through NHAI. Therefore, the Central Government is the appropriate Government for such ventures.

Dear Mr. Pan Singh Dangwal and Mr. Umakanthan Sir,

Thank you very much to both of you for your valuable comments. My query was clarified from the comments and supporting documents provided by Dangwal Sir himself. The only thing I want to clarify is regarding the appropriate government as NHAI, our client comes under the central government, which Mr. Umakanthan Sir's comment has addressed.

Once again, thank you very much for your support and guidance.

Regards, P. K. Singh Manager - HR & Admin 8830047957