Analysis Of Minimum Wage

Devansh Tiwari, University of Petroleum and Energy Studies

Minimum wage is not defined anywhere in any statute not even in the most recent law which is code on wages 2019 but section 6 read with section 9 of the code on wages 2019 empowers the appropriate government to fix the minimum wages. For our understanding of minimum wage we can refer to the definition provided by International Labour Organization-

“The minimum amount of remuneration that an employer is required to pay wage earners for the work performed during a given period, which cannot be reduced by collective agreement or an individual contract”.

The objective of minimum wage is to safeguard workers against unduly low wages. Workers especially those who are employed in unorganized sector are at the most vulnerable position when it comes to the fixation of wages that’s why minimum wages plays a crucial role at such instance it provide workers a tool to bargain with employer. Minimum wages can reduce the exploitation of works to greater extent and it shall also ensure a basic income to sustain themselves and hence reducing the disparity in income. This could be seen in a case where supreme court held that, if minimum wage prescribed under minimum wages act are not paid that would be punishable under section 22 of the said act and an agreement or contract contrary to the notification would be void under section 25 of the act. Therefore, when minimum wages are fixed for an industry there can be no settlement for payment of lower wages even in respect of factories which have closed down as a consequence of the notification. It is open to the State Government to reconsider the matter and modify the notification.2