Minimum Wages

             Fair Wages


The Term “Minimum wage” Literally Means  “The minimum payment, an employer has to give to an employee for a particular work, i.e, the lowest limit, below which wages cannot be allowed to sink”

 Fair Wage is more than minimum wage but less than the living wage.


Section 3 of the Minimum wages Act provides for different minimum rates of minimum wages for different localities.

Fair wage is fixed, taking into consideration, the present economic position and further prospects of the Industry.


Components/ Constituents of Minimum Wages -

(i) a basic rate of wages and a special allowance at a rate to be adjusted at such intervals and in such manner as the appropriate government may direct to accord as nearly as practicable with the variation in the cost of living index number applicable to such workers (hereinafter referred to as the "cost of living allowance"); or

 (ii) a basic rate of wages with or without the cost of living allowance and the cash value of the concessions in respect of suppliers of essential commodities at concession rates where so authorized; or

 (iii) an all-inclusive rate allowing for the basic rate the cost of living allowance and the cash value of the concessions if any.
(Section 4 of Minimum Wages Act)  

To Determine fair wage, Following factors are taken into Consideration -

1) The Productivity of Labour  

2) The Prevailing rates of wages in the same industry for similar occupation in the same neighboring locality

3) the Level of national income and its distribution; and

4) The place of Industry in the economy of the Country


The Minimum Wage must, therefore, provide not merely for the bare substance of life but also for the preservation of the efficiency of a worker. For this purpose, the minimum wage must also provide for the same measure of education, medical requirement, and amenities.

The Concept of fair wages, therefore, involves a rate sufficiently high enable the worker to provide a standard family with food, shelter, clothing, medical care and education for children appropriate to his status in life but not at a rate exceeding the wage-earning capacity of the class of establishment concerned.


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