What is the minimum wage of India?
Each Indian states have different rules regarding minimum wages. This raises the question that what is the minimum wage of India in the mind of employers. Each state fixes the minimum salary by considering some factors. The factors include economic factors, working conditions, living standards of labourers, cost of living, and the nature of work. The daily wages paid to the workers are combined with a Variable dearness allowance. An unorganised sector employee must receive VDA whether the consumer price index increases or decreases.
A minimum wage is crucial for workers to protect them against unduly low payments. At present, the average minimum wage in India is Rs 176/day for an eight-hour workday. All unskilled, semi-skilled, and skilled workers are entitled to minimum wages.
What are the components of minimum wage?
A minimum salary comprises the basic salary and allowances. Allowances are for shift work and irregular working hours. Overtime working payments are not calculated in the minimum wage.
Gross wage consists of:
- The base pay agreed upon in your contract
- Performance-based compensation and accommodations for shift work, irregular hours, etc.
- Fixed payments for your turnover made each week or month
- Third-party payments for work-related services
Components not included:
- Overtime pay
- Leave allowance
- Profit shares
- Special payments
- Future payments
- Expense allowances
- End-of-Year allowance
Which factors influence minimum wages?
In India, different states have different rules for minimum wages. These factors are taken into consideration while fixing the minimum wage in India.
- Income level of the state
- Paying capacity of the employers
- Prices of essential commodities
- Productivity, and
- Local conditions
Minimum wages across Indian states?
Each state in India has different minimum wages. The cost of living, expenditures, working circumstances, and living conditions in scheduled employment can all be better understood by the state government.
Minimum wage in Delhi
The wages given below are based on the Delhi minimum wages notification (Oct 2022)
- For unskilled workers, the minimum wage per month is ₹16,792
- Semi-skilled workers should get ₹18,499 per month as minimum wage.
- Skilled workers should get ₹20,357 per month as minimum wage.
- For non-matriculate clerical staff, the minimum wage should be ₹ 18,499 per month.
- For matriculate clerical staff, the minimum wage per month is ₹20,357.
- Graduate clerical staff should get 22,146 per month as minimum wage.
Minimum wage in U.P
The minimum wage in U.P given below is based on the Uttar Pradesh minimum wages notification (Oct 2022)
- For unskilled workers, the minimum wage per month is ₹9,743
- Semi-skilled workers should get ₹10,717 per month as minimum wage.
- Skilled workers should get ₹12,005 per month as minimum wage.
Minimum wage in Maharashtra
Employers are advised to make arrear payments following the minimum wage for shops and establishments in Maharashtra, effective from 1 July 2022.
- For unskilled workers, the minimum wage per month is ₹12,127
- Semi-skilled workers should get ₹12,962 per month as minimum wage.
- Skilled workers should get ₹13,738 per month as minimum wage
Minimum wage in Kerala
The wages given below are based on the Kerala minimum wages notification (Aug 2022)
- For Grade A workers, the minimum wage per month is ₹13,610
- Grade-B workers should get ₹13,400 per month as minimum wage.
- Grade C workers should get ₹13,190 per month as minimum wage.
- Grade D workers should get ₹12,980 per month as minimum wage.
Minimum wage in Punjab
The wages given below are based on the minimum wage notification on 11th Oct 2022.
- For unskilled workers, the minimum wage per month is ₹9,907
- Semi-skilled workers should get ₹10,687 per month as minimum wage.
- Skilled workers should get ₹11,584 per month as minimum wage.
Minimum wage in Karnataka
The minimum wages are effective from 1 April 2022.
- For unskilled workers, the minimum wage per month is ₹13,821
- Semi-skilled workers should get ₹14,979 per month as minimum wage.
- Skilled workers should get ₹16,254 per month as minimum wage.
- High-skilled workers should get ₹17,656 per month as minimum wage.
Minimum wage in Gujarat
These wages are based on the Gujarat minimum wages notification (Oct 2022)
- For unskilled workers, the minimum wage per month is ₹9,445
- Semi-skilled workers should get ₹9,653 per month as minimum wage.
- Skilled workers should get ₹9,887 per month as minimum wage.
Minimum wage in Rajasthan
The wages are based on the Tamil Nadu minimum wages notification (April 2022)
- For unskilled workers, the minimum wage per month is ₹6,734
- Semi-skilled workers should get ₹7,046 per month as minimum wage.
- Skilled workers should get ₹7,358 per month as minimum wage.
- Skilled workers should get ₹8,658 per month as minimum wage.
How minimum wage is calculated in India?
Minimum wages are calculated based on the worker’s skills, the nature of work, and the standard of livelihood in a certain place. Workers are put into four board categories. They are unskilled, semi-skilled, skilled, and highly skilled. Labour law in India fixed certain parameters for fixing minimum wages. State governments have the right to fix minimum wages by hour, day, or month.
Criteria for minimum wages in India:
1. Minimum time rate- A minimum rate of pay based on the number of hours worked
2. Minimum piece rate-A daily wage based on the quantity of products produced
3. Guaranteed time rate- A minimum rate of salary based on timely work done.
4. Overtime rate- A minimum rate for the overtime work done by the employees.
Parameters of fixing minimum wages:
A minimum 20% of the total salary should include for:
- 3 consumption units per year
- Minimum nutrition of 2700 calories per adult.
- Clothing requirements of 66 meters per year for each family.
- House rent for the minimum area under the Industrial housing scheme.
- Fuel, lighting, and other items.
A minimum 25% of the total wage should include for:
- Children’s education
- Medical needs
- Minimum recreation
- Old age and marriage
Government fixes minimum wage in India
According to the Indian Constitution, labour law is a concurrent topic, hence both the national and state governments will decide on the minimum wage rate. For some specific employment, the central government has the responsibility to fix the wage. However, in other areas state government establishes the minimum wages.
Two methods of fixing wages:
Committee method
The government appoints committees, as the name suggests, to conduct investigations and offer suggestions for setting and updating the minimum wage. In India, there are five regional minimum wage advisory committees. Their goal is to standardise the minimum salary for various scheduled employments.
Notification method
To inform those who may be impacted, the competent government publishes suggestions in the official gazette. The notification is sent to people with a date. The notice date is at least two months in the future. The submitted proposals are due for review on that day. The government consults numerous committees before disseminating this kind of notification.
India has no national minimum wage
India does not have a national minimum wage. It is a multi-jurisdictional issue as it is considered by both the state and central government. This is done to ensure the welfare of the workers in all employment categories. According to the code of wages act, 2019, state governments are responsible for the minimum wages.
The cost of living, expenditures, working circumstances, and living conditions in scheduled employment can all be better understood by the state government. They are empowered to fix the minimum wages within their jurisdiction.
Minimum wages vary continuously as per the state. It depends on the economic conditions, infrastructure, and government policies. Ensuring the application of a national minimum wage for all workers across the nation is not practically possible. That is why India has no national minimum wage.
Penalty for non-compliance
According to the minimum wages act, a worker denied minimum wages can complain to the labour commission of India. Upon investigation, the guilty employer will be punished with imprisonment for up to six months and/or a fine of Rs.500 or both.
The new code of wages, 2019 which is still not implemented, prescribed three months imprisonment and a fine of one lakh rupees.
India’s minimum wage is based on several factors. Here, setting the minimum wage is a joint responsibility of the central and state governments. The minimum wage varies from state to state in India depending on infrastructure, work type, and economic conditions. Paying less than the minimum wage is illegal. Employers may thus be subject to fines if found guilty. The Indian government consistently makes solid decisions for the well-being of the workforce. The 2019 Code on Wages, which has not yet gone into effect, calls for harsher penalties for firms who don’t comply.
