There is no move by the Centre to fix a national floor rate of Rs. 18,000/ month for minimum wages, the Labour Ministry said in a statement on Tuesday. It also denied any move to revise the formula of fixing wages by increasing the number of family members from three to six, as demanded by trade unions.
“It is clarified that the Central Government has not fixed or mentioned any amount as “national minimum wage” in the Code on Wages Bill 2017. The apprehension that minimum wage of Rs. 18,000 per month has been fixed for all employees is thus incorrect, false and baseless. The minimum wages will vary from place to place depending upon skill required, arduousness of the work assigned and geographical location,” the Labour Ministry said in a release.
Interestingly, the statement comes a day after the new Labour Minister, Santosh Gangwar, took charge of the Ministry replacing Bandaru Dattatreya, who had announced the setting up of a committee to review the wage fixation formula on August 3.
The Labour Ministry, however, clarified that the Code on Wages Bill 2017, clearly stated that the Centre before fixing the national minimum wage, may obtain the advice of the Central Advisory Board, having representatives from employers and employees. “Therefore, the code provides for a consultative mechanism before determining the national minimum wage,” it said.
The statement comes as a big relief to employers who have been “apprehensive” about the move, saying it would affect their competitiveness, but deals a blow to trade unions, who have been demanding higher minimum wages and a revised unit-based formula for fixing wages from three members of a family to six, including dependent parents. Incidentally, 11 central trade unions are also gearing up for a nation-wide strike on their 12-point charter of demands, including minimum wages.
The Ministry also allayed industry fears over a revised methodology for calculation of minimum wages by enhancing the units from three to six. “It was purely a demand raised by trade unions in the recent meeting of the Central Advisory Board on Minimum Wages. However, it is clarified that such proposal is not part of the Code on Wages Bill,” it said.
The Code on Wages Bill 2017 was introduced in the Lok Sabha on August 10, and subsumes four existing laws — the Minimum Wages Act, 1948; the Payment of Wages Act, 1936; the Payment of Bonus Act, 1965; and the Equal Remuneration Act, 1976.