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Minimum wages act 1948
There have been issues with the act although it is deemed to be
progressive in nature. The unorganized
sector has been the main problem. According to the reports 422.6
(94%) million workers out of the
total workforce of 457.5 million belong to the unorganised
sector in India. They contribute to alarge portion of GDP
growth(around 60%). There are issues with a clear policy regarding
this
workforce in India. This is mainly due to its poor norms of
fixation, enforcement, mplementation
and coverage in various parts of the countryIssues:
1. Rules/Norms for fixing the minimum wages:a. The minimum wage
has to be decided by each State. Many States while fixing the
minimum wages do not link it to the Dearness Allowance. This
results in erosion of real
wages due to inflation.
b. There is a clause that the wages should be revised every 5
years but it is not fixed. So ifthe wages are not revised the old
wage can continue. This has made the Stateauthorities lazy and less
accountable.
c. Different wages are fixed for the job in different sectors.
E.g. A watchman in plasticindustry or road construction or building
should be paid the same wage. To overcome
this issue different occupations have been divided into
unskilled, semi-skilled, skilled
and highly-skilled classes. But this has not been followed by
all the States
2. Coverage of the Acta. Currently the number of scheduled
employments in the Central Government is 45
and the State sphere it is 1232. The criterion for inclusion in
the list of scheduled
employment is that there should be at least 1000 workers engaged
in that activityin the state. Thus, many activities are excluded
from the list.
b. Large portion of unorganized sector is left out.3.
Implementation
a. Implementation has been poor. Often exemptions from the
payment of minimumwages have been granted to industries.
Administration has been ineffective inchecking the implementation
and punishing the guilty from exploiting poor.
4. EnforcementSuggestions:
1. Purchasing power should be considered while fixing the
minimum wage2. Wage should be such that it should motivate the
workers3. Employer margins should also be kept in mind so that they
do not look for ways exploit the poor4. An effective model should
be developed considering all the economic issues like inflation
and
providing a wage that meets the basic requirements, connecting
it with Consumer Price Index,
etc. Issues of employers should also be kept in mind and an
optimum wage level should be
decided.
5. Progammes to educate the poor of their rights and effective
addressing of their problems bycourts and government
authorities
6. Strict implementation of the Act by State authorities and
enforcement by the police and courts7. Involvement of Trade Unions
and NGOs and giving them social benefits and recognition for
their
work
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8. Consideration for women workers and relaxations for them as
they tend to be more vulnerable.They have issues with sanitation,
children and being vulnerable, and minimum wages should
incorporate these issues as well.
9. Once UID is issued, every person can be tracked in India. His
all details will be available. Shiftingall the information on an IT
platform will remove the scope for any exploitation by the
employers and will ensure effective implementation of the Act.
This is a long term solution as
the population of India is very large and it will take time to
cover everyone.
Payment of Wages Act 1936
The objective of the Act is to provide wages within prescribed
time to the workers, see that no
deductions are done by the employer other than that prescribed
in the law and payment is done in such
a manner that the employee will benefit.
Issues:
1. Non-payment of wages still a cause for industrial dispute in
organized sector2. Agriculture sector is not covered and also the
workers who are not hired through sub-
contractors(they form a good proportion which is being
exploited)
3. Employees in are not educated about the rules and in cases
where no effective trade unions aretheir this can be a major cause
to their exploitation by the employer
4. Employer in certain cases fails to see the risk and there
should be effective mechanism toprotect the employer and let him
provide proper information. The strikes should not be favored
by the government and speedy resolution mechanisms should be
devised
5. Problem with implementation and enforcementSolutions:
1. Devise policies to address those working in agriculture and
not under any sub-contractor2. Speedy resolution mechanism to solve
the cases3. Implementation by State authorities and seeing that the
laws are enforced4. Involving NGOs and educating trade unions and
employees about the law5. Promoting use of IT framework and with
the UID project in process, things could be organized in
such a manner that neither the employees are exploited and the
employer also is saved from
strikes by providing adequate reasons for nonpayment
6. In case of nonpayment, case should be handled quickly and
work restored to normalcy.Employer should be given time to get
resources to dispense cash. Criticality of the work process
and industry should be taken into account because if strikes
happen company can go in losses.
Emphasis is that government should not promote strikes in every
case.
