The government is likely to do away with the existing concept of scheduled employments under the Code on Wages, a move that will extend the benefit of obligatory minimum wages to all workers. 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 notified by the Centre and 1,709 listed by the state governments. Official sources said that the removal of restrictive criteria will help in bringing parity of wages among workers in different industries apart form universalising the principle of minimum wage. The proposed code, which 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 — will have a provision for setting up a committee which will set and revise the minimum wages from time to time. A source in the labour ministry said even for short duration of work, minimum wages will be applied and in such cases, it will be calculated on hourly basis.
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.
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. 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. The NFLMW now stands at Rs 176 per day.
Labour ministry sources said with the passage of labour code on wages, which might take more than six months since the Bill is likely to be referred to a select committee after tabling in Parliament next week, the provision of the NFLMW will be subsumed and the ingredients of calculating minimum wage at present will also be changed. The ingredients in the basket for calculating minimum wages in future are not known, but even if the proposed committee uses the present NFLMW, which is considered bare minimum, it will push the cost of labour. This will not only affect competitiveness of trade and industry, but also hit the ability of states to attract investments on the basis of lower wage rates.
The passage of the Code on Wages will be the first among the four the present dispensation has been looking at to unleash its long-pending labour reform initiative by amalgamating 44 existing labour Acts into four codes — on wages, industrial relations, social security & safety and health & working conditions.