India's wage policy is designed to secure social justice by preventing sweated labor through statutory price floors.
1. Three Concepts of Wages
- Minimum Wage: Must provide not merely for the bare sustenance of life, but for the preservation of the efficiency of the worker, including education, medical requirements, and amenities. It is a mandatory statutory floor.
- Fair Wage: Lies between the minimum wage and the living wage. It is adjusted based on the capacity of the industry to pay and prevailing wage rates in the region.
- Living Wage: The highest wage standard. It must enable the male earner to provide for himself and his family not merely the essentials of food, clothing, and shelter, but a measure of frugal comfort, insurance against old age, and education for children.
2. Section 5: Fixation and Revision Procedures
The government can fix or revise minimum wages in scheduled employments using two distinct methods:
- The Committee Method (Section 5(1)(a)):
The government appoints committees and sub-committees to hold inquiries and advise it regarding the fixation or revision of wages. - The Notification Method (Section 5(1)(b)):
The government publishes its proposals in the Official Gazette for the information of persons likely to be affected. It gives at least two months for representations, considers the feedback, and notifies the wage rates.
3. Overtime and Rest
The Act mandates that the government fix working hours (generally 9 hours a day). If a worker works beyond these hours, they are entitled to Overtime Wages, which must be paid at double the ordinary rate of wages.