i

S. S. Jain Subodh Law College, Jaipur

Affiliated to

Dr. Bhimrao Ambedkar Law University

Session 2023-24

“Minimum Wages Act 1948: Objects,

Constitutional Validity & its Features”
Submitted by: Yash Sharma Submitted to: Mr. Manoj Jain
Subject: Labour Law Assistant Professor of Law
Semester: VI
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DECLARATION BY THE STUDENT

I hereby declare that the work reported in this project entitled, “Minimum
Wages Act 1948: Objects, Constitutional Validity & its Features”, submitted
to the S. S. Jain Subodh Law College, Jaipur is an authentic record of my
work carried out under the supervision of Asst. Prof. Manoj Jain. It is further
certified that there is no plagiarism in this work. I further attest that I am fully
responsible for its content.

(Signature of the Scholar)

Name: Yash Sharma
Place: Jaipur,
Rajasthan
Date:
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SUPERVISOR’S CERTIFICATE

This is to certify that the work reported in the project entitled, “Minimum
Wages Act 1948: Objects, Constitutional Validity & its Features”, submitted
by Yash Sharma, to the S. S. Jain Subodh Law College, Jaipur is a bonafide
record of his original work carried out under my supervision. It is further
certified there is no plagiarism in it. This work is being recommended for
further evaluation by the external examiner.

Place: Jaipur, Rajasthan (Signature of the Supervisor)

Date:
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ACKNOWLEDGEMENT

I would like to express my sincere gratitude to all those who have contributed to
the successful completion of this project.

First and foremost, I am deeply indebted to my esteemed professor, for their

invaluable guidance, support, and encouragement throughout the project. Their
expertise and constructive criticism have been instrumental in shaping this
work.

I am also grateful to S.S. Jain Subodh Law College for providing the necessary
resources and facilities to undertake this research.

I would like to extend my heartfelt thanks to my friends and family for their
unwavering support and belief in me. Their encouragement and moral support
have been a constant source of motivation.

I acknowledge the contributions of various authors, researchers, and experts

whose works have enriched my understanding of the subject matter. Their
research has been invaluable in shaping the direction of this project.

Lastly, I take full responsibility for any errors or omissions that may be present
in this project.

Thank you.
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TABLE OF CONTENTS

CONTENTS PAGE NO.

1. Introduction……………………………….....................................................7
2. Objectives of the Minimum Wages Act, 1948………………………....…....8
3. Constitutional Validity of the Minimum Wages Act, 1948 ………….......…9
4. Key Features of the Minimum Wages Act, 1948…………………..........…11
5. Impact of the Minimum Wages Act, 1948.……………………..............….13
6. Recent Amendments and Contemporary Issues……………………..…......14
7. Conclusion…………………………………….…...…………………….…16
8. Bibliography………………………………........…………………….……17
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ABSTRACT

The Minimum Wages Act of 1948 was enacted with the primary objective of
ensuring that workers receive a fair and adequate wage for their labor. This
legislation emerged from the need to provide a minimum wage floor to protect
workers from exploitation and to promote equitable wage standards. The Act
mandates the setting of minimum wages by both state and central authorities,
ensuring that wage rates are fixed based on the type of work and cost of living.
Its constitutional validity is upheld under the framework of the Indian
Constitution, particularly under the Directive Principles of State Policy which
empower the state to regulate conditions of work. Key features of the Act
include the establishment of wage boards, provisions for the timely payment of
wages, and penalties for non-compliance. The Act serves as a fundamental tool
in the labor law framework, aiming to enhance the socio-economic well-being
of workers by safeguarding their minimum earning levels.
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CHAPTER 1. INTRODUCTION

1.1 Background and Need for the Minimum Wages Act, 1948

The Minimum Wages Act, 1948, was enacted by the Indian Parliament to
ensure that workers in certain specified industries receive fair wages. Before its
enactment, there was no legal framework to protect workers from being paid
less than a living wage, leading to widespread exploitation, especially in
unorganized sectors. The Act aimed to bridge this gap by mandating minimum
wages for different types of employment. The need for such legislation was
driven by the recognition that economic justice is integral to social justice,
which is a foundational principle enshrined in the Indian Constitution.

1.2 Scope and Application of the Act

The Act applies to certain scheduled employments as specified by the central

and state governments. It covers both skilled and unskilled labor across various
industries, including agriculture. The scope of the Act is broad, ensuring that it
can adapt to changing economic conditions and extend its protections to various
categories of workers, including those in the informal sector.

1.3 Relevance in the Current Economic Context

Even after decades of its implementation, the Minimum Wages Act remains
relevant, particularly in the context of rising income inequality and the
prevalence of informal employment in India. It acts as a crucial legal safeguard
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to prevent the underpayment of wages, thus contributing to the reduction of

poverty and inequality.

CHAPTER 2. OBJECTIVES OF THE MINIMUM WAGES

ACT, 1948

2.1 Ensuring Basic Minimum Wages for Workers

The primary objective of the Act is to ensure that every worker receives a basic
minimum wage, sufficient to meet their basic needs, including food, clothing,
and shelter. This helps to provide a standard of living that supports the physical
well-being of workers and their families.

2.2 Protection Against Exploitation

By mandating minimum wages, the Act seeks to protect workers from

exploitation by employers who might otherwise pay them wages below
subsistence levels. The Act empowers the government to set minimum wages
based on factors such as the cost of living, the nature of the work, and regional
disparities.

2.3 Promotion of Fair and Equal Treatment

The Act promotes fair and equal treatment by standardizing wages across
industries and regions, thereby preventing wage discrimination. This is
particularly significant for marginalized groups, including women and lower-
caste workers, who have historically been paid less than their counterparts.

2.4 Reducing Wage Disparities Across Regions and Sectors

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The Act addresses wage disparities by allowing for the fixing of different
minimum wages for different employments, considering the local conditions
and the nature of work. This flexibility ensures that wages are fair and
commensurate with the work performed, regardless of the region or industry.

CHAPTER 3. CONSTITUTIONAL VALIDITY OF THE

MINIMUM WAGES ACT, 1948

3.1 Legal Framework and Legislative Competence

The Minimum Wages Act, 1948, derives its legal authority from the Concurrent
List of the Indian Constitution, which allows both the central and state
governments to legislate on labor matters. The Act has been upheld as
constitutionally valid in several landmark judgments, where the judiciary
emphasized its importance in promoting social justice.

3.2 Key Judicial Interpretations and Case Laws

One of the key cases that examined the constitutional validity of the Act is
Bijay Cotton Mills Ltd. V. State of Ajmer 1. The Supreme Court upheld the
validity of the Minimum Wages Act, stating that it does not violate Article
19(1)(g) of the Constitution, which guarantees the freedom to practice any
profession or carry on any occupation, trade, or business. The Court reasoned
that the Act’s provisions are a reasonable restriction in the interest of the general
public.

Another important case is Edward Mills Co. Ltd. V. State of Ajmer 2, where the
Supreme Court held that the Act’s provision for fixing minimum wages does
not violate the right to equality under Article 14 of the Constitution. The Court

1
Bijay Cotton Mills Ltd. V. State of Ajmer (1955 AIR 33, 1954 SCR 752).
2
Edward Mills Co. Ltd. V. State of Ajmer (1955 AIR 25, 1954 SCR 735)
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observed that the classification of workers and the fixation of wages based on
the nature of employment and local conditions were reasonable and did not
constitute discrimination.

3.3 Compliance with Fundamental Rights

The Act aligns with the fundamental rights enshrined in the Constitution,
particularly Articles 14, 19, and 21. Article 21, which guarantees the right to life
and personal liberty, has been interpreted by the judiciary to include the right to
a livelihood. By ensuring minimum wages, the Act helps in securing this right.

3.4 Harmonization with Directive Principles of State Policy

The Directive Principles of State Policy, especially Articles 38 and 43, guide the
state to secure a social order for the promotion of welfare of the people and to
ensure that workers receive a living wage. The Minimum Wages Act, 1948, is a
legislative tool that helps in achieving these goals, reflecting the commitment of
the state to uphold social and economic justice.
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CHAPTER 4. KEY FEATURES OF THE MINIMUM WAGES

ACT, 1948

4.1 Definitions and Key Terminologies

The Act defines several key terms essential for its application. For instance,
“employer,” “employee,” “wages,” and “scheduled employment” are all defined
to provide clarity. Section 2(h) of the Act defines “wages” as all remuneration
capable of being expressed in terms of money, which would, if the terms of
employment were fulfilled, be payable to a person employed in respect of his
employment.

4.2 Process for Fixation and Revision of Minimum Wages

Sections 3 and 4 of the Act outline the procedure for fixing and revising
minimum wages. The appropriate government is empowered to fix minimum
wages for different categories of work and to revise these wages periodically.
The Act allows for the fixation of different rates for different employments and
even for different classes within the same employment.

4.3 Advisory Boards and Committees

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The Act provides for the establishment of Advisory Boards and Committees
under Section 7 and Section 9. These bodies consist of representatives of
employers, employees, and independent persons, and are tasked with advising
the government on the fixation and revision of minimum wages. Their
recommendations play a crucial role in ensuring that the wages set are fair and
reasonable.

4.4 Provisions for Enforcement and Inspections

To ensure compliance with the Act, provisions for enforcement and inspections
are laid down in Sections 19 to 21. The Act empowers inspectors to enter any
premises, examine records, and take evidence of any person necessary for the
enforcement of the Act. This ensures that employers adhere to the minimum
wage regulations and that workers are not deprived of their rightful earnings.

4.5 Penalties for Non-Compliance

Sections 22 to 26 deal with penalties for non-compliance with the provisions of

the Act. Employers who fail to pay the minimum wages or who violate other
provisions of the Act can be punished with fines or imprisonment. The stringent
penalty provisions act as a deterrent against violations and ensure that the rights
of workers are protected.

4.6 Special Provisions for Certain Employments

The Act recognizes that certain categories of workers may require special
provisions due to the nature of their work or the conditions of their employment.
For example, workers in the agricultural sector or those in highly hazardous
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industries are given special consideration in the fixation of minimum wages,

ensuring their safety and welfare.

4.7 Exemptions and Exceptions

The Act allows for certain exemptions and exceptions, as outlined in Section 26.
For example, the government may exempt certain employments from the
provisions of the Act if it is satisfied that adequate remuneration is otherwise
being paid to the employees.

CHAPTER 5. IMPACT OF MINIMUM WAGES ACT, 1948

5.1 Social and Economic Impact on Workers

The implementation of the Minimum Wages Act has had a significant impact on
improving the socio-economic conditions of workers, particularly in the
unorganized sector. By ensuring a basic minimum wage, the Act has helped in
reducing poverty, enhancing the standard of living, and providing economic
security to millions of workers across India.

5.2 Implications for Employers and Industry

For employers, the Act imposes an obligation to ensure that workers are paid
wages that are fair and just. While this may increase the cost of labor, it also
contributes to a more motivated and productive workforce, which can lead to
higher efficiency and output in the long run.

5.3 Challenges in Implementation and Compliance

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Despite its benefits, the implementation of the Minimum Wages Act faces
several challenges. These include lack of awareness among workers, inadequate
enforcement mechanisms, and the evasion of compliance by employers.
Additionally, the disparity in minimum wage rates across states creates
complications for industries operating in multiple regions.

5.4 Role in Promoting Social Justice

The Act plays a crucial role in promoting social justice by protecting the rights
of workers and ensuring that they are not exploited. It aligns with the broader
goals of the Indian Constitution, which seeks to create an egalitarian society
where every citizen has the opportunity to lead a life of dignity and respect.

CHAPTER 6. RECENT AMENDMENTS AND

CONTEMPORARY ISSUES

6.1 Overview of Recent Amendments

The Minimum Wages Act, 1948, has undergone several amendments to keep it
relevant and effective. One of the significant amendments was made in 2017,
where the government introduced the Code on Wages, 2019, which consolidates
the Minimum Wages Act, 1948, the Payment of Wages Act, 1936, the Equal
Remuneration Act, 1976, and the Payment of Bonus Act, 1965. The Code on
Wages aims to simplify and rationalize the provisions related to wages and to
extend the coverage to more sectors and workers.

The Code on Wages Introduces the concept of a national minimum wage, which
will serve as a floor below which no state can set its minimum wages. This
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amendment aims to address the disparities in wage rates across different states
and ensure a uniform standard of living for workers across the country.

6.2 Current Challenges and Debates

Despite the amendments, there are ongoing debates and challenges surrounding
the implementation of minimum wage laws in India. One of the key issues is the
effective enforcement of the minimum wage provisions, particularly in the
unorganized sector. There is also a debate on whether the minimum wage rates
set by the government are adequate to meet the living expenses of workers,
considering the rising cost of living.

Another contemporary issue is the impact of minimum wage laws on

employment. Some economists argue that setting high minimum wages may
lead to job losses, particularly in small businesses that may not be able to afford
higher wages. On the other hand, proponents of higher minimum wages argue
that they can boost the economy by increasing the purchasing power of workers.

6.3 Comparative Analysis with Global Wage Policies

A comparative analysis of minimum wage policies in different countries shows

varying approaches. For example, in the United States, the federal government
sets a national minimum wage, but states can set higher minimum wages if they
choose. In contrast, countries like the United Kingdom have a uniform national
minimum wage, which is periodically reviewed and adjusted based on economic
conditions.
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In countries like Germany and Japan, minimum wages are set through collective
bargaining agreements between employers and trade unions, ensuring that
wages are aligned with the specific needs of different industries. Comparing
India’s minimum wage laws with global practices highlights the need for
continuous review and adjustment of wage rates to keep pace with economic
changes.

7. CONCLUSION

The Minimum Wages Act, 1948, has been a cornerstone of India’s labor laws,
providing a legal framework for ensuring that workers receive fair and just
wages. The Act’s objectives of protecting workers from exploitation, promoting
social justice, and reducing wage disparities have been largely achieved,
although challenges remain in its implementation and enforcement.

The constitutional validity of the Act has been upheld by the judiciary,
reinforcing its importance in the pursuit of social and economic justice. The
Act’s key features, including the process for fixing and revising minimum
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wages, the role of advisory boards, and the enforcement mechanisms, are
designed to ensure that workers’ rights are protected.

Looking forward, there is a need for continuous review and adjustment of

minimum wage rates to keep up with the changing economic conditions and the
rising cost of living. The implementation of the Code on Wages, 2019, provides
an opportunity to streamline wage laws and extend their coverage to more
workers.

To improve compliance, it is essential to strengthen enforcement mechanisms,

increase awareness among workers about their rights, and encourage collective
bargaining. Additionally, the government should consider setting a realistic
national minimum wage that reflects the actual living expenses of workers and
provides them with a decent standard of living.

Further research and policy analysis are needed to assess the impact of
minimum wage laws on employment, particularly in the informal sector. It is
also important to learn from global best practices and adapt them to the Indian
context, ensuring that the minimum wage laws contribute to a more equitable
and just society.

8. BIBLIOGRAPHY

Books:

- “Labor Law in India” by S.N. Misra.

- “Minimum Wages Act, 1948: A Comprehensive Commentary” by H.L.
Kumar.

Case Laws:
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- Bijay Cotton Mills Ltd. V. State of Ajmer, 1955 AIR 33, 1954 SCR 752.
- Edward Mills Co. Ltd. V. State of Ajmer, 1955 AIR 25, 1954 SCR 735.

Legislation:

- The Minimum Wages Act, 1948.

- The Code on Wages, 2019.