Government releases draft mechanism for calculating minimum wages, seeks feedback from industry

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The government has proposed draft mechanisms for calculating minimum wages and payment of wages beside other provisions under the Code on Wages (Central) Rules. This is a follow-up to the Code on Wages legislation enacted last year.The government has sought feedback from various stakeholders. These can be submitted within next 45 day. These views will…

At a glance:

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The government has proposed draft mechanisms for calculating minimum wages and payment of wages beside other provisions under the Code on Wages (Central) Rules. This is a follow-up to the Code on Wages legislation enacted last year.

The government has sought feedback from various stakeholders. These can be submitted within next 45 day. These views will be considered before notifying the final rules.

Minimum wages

According to the draft, for calculating minimum rate of wages on a day basis, six criteria can be used: standard family of four (self, spouse and two children), net intake of 2,700 calories per day per consumption unit, 66 metres cloth per year per standard working-class family, housing rent expenditure to constitute 10 per cent of food and clothing expenditure, fuel, electricity and other miscellaneous items of expenditure to constitute 20 per cent of minimum wage, and expenditure for children’s education, medical requirement, recreation and expenditure on contingencies to constitute 25 per cent of minimum wage.

“When the rate of wages for a day is fixed, then, such amount shall be divided by eight for fixing the rate of wages for an hour and multiplied by twenty-six for fixing the rate of wages for a month,” draft rule says. The power to fix minimum wages will continue to be vested in the Central Government as well the State Government in their respective sphere. It has been proposed to divide geographical area into three categories: metropolitan, non-metropolitan and rural. There is a proposal to form a Technical Committee to suggest, modify, add or delete particular occupation in the tentative list of four categories: unskilled, semi-skilled, skilled and highly skilled.

The draft has included 123 occupations under unskilled category comprising loader/unloader, wood cutter, office boy, cleaner, gate man, sweeper, attendants, beldar etc. The semi-skilled category has 127 types of occupation which include butler/cook, khalasi,, masalchi, dhobi, jamadar. The skilled category has 320 types of occupations including munshi, typist, book keeper, librarian, Hindi translator, data entry operator. The highly skilled category has 111 types of occupations, including armed security guards, head mechanics, compounder, blacksmith.

Working hours

The draft rules say a normal working day comprises of eight hours of work and one or more intervals of rest, which in total shall not exceed one hour. An employee will get a day of rest every week, which shall ordinarily be Sunday, but the employer may fix any other day of the week depending upon the requirement. An employee will be entitled for a rest day if he has worked under the same employer for a continuous period of not less than six days. The draft rule says that if a shift extends beyond midnight, a rest day for the whole day needs to be given. A ‘rest day’ means a full 24-hour period beginning from the time when the shift ends.

Dearness Allowance

The draft has prescribed a revision in the Dearness Allowance (DA) twice a year — once by April 1 and then by October 1. The DA will be payable on the minimum wages. This allowance helps the wage-earner get more money in case prices of various commodities go up. As on date, the Government revises the DA twice a year for its employees and officers: the first instalment is effective from January 1, and the second one from July 1.

Every employer will issue wage slips, electronically or physically to the employees, it said.

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