Minimum wage bill passed
Parliament on Friday passed the first of a batch of four labour reforms bills, empowering the Centre to fix a national floor-level wage, a lower limit that no state government can flout while stipulating its own minimum wages.
The floor-level wage will be notified after the Centre arrives at a figure following discussions with a tripartite body of employers, employee unions and state governments.
The Code on Wages Bill seeks to replace four existing laws, including the Minimum Wage Act of 1948.
Till now, each state government has been notifying its minimum wages for various kinds of labour — skilled, semi-skilled and unskilled — in various spheres such as agriculture and construction.
With each state government having sole authority to decide its minimum wages, these were not being revised frequently, leading to wide disparity between the wage rates for the same work among the states.
A commission set up by the Centre in 1996 suggested the Union government notify a National Minimum Floor Level Wage that should serve as a base rate for the states. It worked out a formula based on the poverty line decided by the Planning Commission.
This non-binding rate, notified every second year, currently stands at Rs 176 a day. Several states have notified wage rates below Rs 176.
A committee set up recently by the labour ministry recommended that the minimum wage be calculated by including a family’s estimated expenses on health, education and nutrition. The committee suggested a minimum wage of Rs 375 a day.
Many experts have expressed fear that even after the Code on Wages Act comes into effect, the Centre will notify a floor wage around Rs 176 since it has rejected its own expert committee’s recommendations.