Minimum Wages Code

Why in news?

The government is likely to do away with the existing concept of scheduled employments under the Code on Wages.

What is the present status?

• Currently, minimum wages set by governments are applicable to only those who work in sectors employing 1,000 or more in the state concerned.
• Such scheduled sectors include 45 sectors notified by the Centre and 1,709 listed by the state governments.

What are the implications?

• The removal of restrictive criteria will help in bringing parity of wages among workers in different industries.
• It universalised the principle of minimum wage.
• It will subsume four existing central labour legislations The Minimum Wages Act, 1948, The Payment of Wages Act, 1936, The Payment of Bonus Act, 1965 and The Equal Remuneration Act, 1976.
• It will have a provision for setting up a committee which will set and revise the minimum wages from time to time.
• Even for short duration of work, minimum wages will be applied and in such cases, it will be calculated on hourly basis.
• This move will extend the benefit of obligatory minimum wages to all workers.
• In the code on wages, the government is also doing away with the variation in minimum wages from sector to sector.
• The entire working population will be categorised on the basis of their skills and not sector-wise.

How minimum wage is calculated?

• The minimum wages for one unskilled agriculture labourer in the central sphere is Rs 300 per day while an unskilled person working in the non-agriculture sector is entitled to get Rs 350 a day.
• The minimum wages is calculated on the basis of the workers’ daily consumption pattern (on the basis of field studies), taking into consideration the minimum 2,700 K cal requirement for a family of three.
• The requirement of 72 meters of cloth per year, fuel, lighting, education and medical need and old age needs of the worker is also taken into consideration.

What is the main problem?

• The minimum wages in the states vary from state to state and in most of the cases is much lower than by the central sector.
• To bridge the gap and tide over its helplessness, as labour is in the concurrent list, the centre introduced the concept of a national floor level minimum wages (NFLMW) in 1991.
• But that also failed to make any cut since it is only suggestive in nature and has no statutory backing.

Source: The Indian Express