Section 12: Minimum time rate wages for piece work

Overview

This section of the Code on Wages, 2019, focuses on ensuring fair wages for employees who are paid based on the amount of work they produce (piece work) rather than the hours they work. It guarantees that these workers receive at least the minimum wage applicable to their job, calculated as if they were paid on a time basis.

Scope and Coverage

• Which employees and establishments are covered: This applies to all employees engaged in piece work in any establishment covered under the Code on Wages, 2019. This includes factories, mines, plantations, shops, and other establishments as defined by the Code.
• Any thresholds or exclusions: There are no specific thresholds or exclusions mentioned in Section 12 itself. However, the overall applicability of the Code on Wages depends on factors like the number of employees in an establishment, as defined elsewhere in the Code.

Key Obligations and Rights

• Main duties of employers: Employers are obligated to ensure that piece workers are paid a minimum wage equivalent to the time rate. This means calculating what the worker *would* have earned if they had worked the standard working hours at the applicable minimum wage rate, and ensuring their piece rate earnings meet or exceed that amount.
• Important rights or protections for employees: Employees have the right to receive at least the minimum wage, even if they are paid on a piece work basis. This protects them from being exploited by being paid very low rates for each unit of work. They have the right to ask their employer to demonstrate how their piece rate ensures they are earning at least the minimum wage.

Compliance and Penalties

If an employer violates this provision, they can face penalties under the Code on Wages, 2019. This may include fines, and in some cases, imprisonment. Government inspectors have the authority to inspect establishments to ensure compliance with the Code, and employees can also file complaints if they believe their rights are being violated.

Practical Examples

• Example 1: A garment worker is paid ₹5 per stitched shirt. The minimum wage is ₹150 per day for an 8-hour workday. The employer must ensure that the worker can stitch enough shirts in a day to earn at least ₹150. If the worker needs to stitch 30 shirts to earn ₹150 (30 x ₹5 = ₹150), that is acceptable. However, if stitching 30 shirts only earns the worker ₹120, the employer must increase the piece rate.
• Example 2: A worker is paid ₹8 per basket of harvested fruits. The minimum wage is ₹200 per day. During a slow harvest season, the worker can only fill 20 baskets. This earns them ₹160 (20 x ₹8 = ₹160). The employer is still obligated to pay the worker ₹200 for that day, bridging the gap between the piece rate earnings and the minimum wage.