Section 9: Power of Central Government to fix floor wage

Overview

This section of the Code on Wages, 2019, deals with setting a minimum wage floor across India. It gives the Central Government the power to decide the lowest wage that can be paid to workers, ensuring a basic standard of living. This is a crucial step towards ensuring fair wages for all workers.

Scope and Coverage

• This provision applies to all employees, regardless of skill level or sector, across India.
• There are no specific thresholds or exclusions mentioned in this section regarding which establishments or employees are covered. The floor wage applies universally.

Key Obligations and Rights

• Employer Obligation: Employers must pay wages equal to or higher than the floor wage fixed by the Central Government. They cannot offer wages below this level.
• Employee Right: Every employee has the right to receive wages that are at least equal to the floor wage. This ensures a minimum level of income for a decent standard of living.
• State Government Limitation: State Governments cannot fix minimum wages lower than the floor wage set by the Central Government. They can, however, fix higher minimum wages if they choose to.

Compliance and Penalties

If an employer violates this provision by paying wages below the floor wage, they can face penalties under the Code on Wages, 2019. This may include fines, prosecution, and other legal consequences. Government inspectors can conduct inspections to ensure compliance, and employees can also report violations. Repeated or serious violations can lead to more severe penalties.

Practical Examples

• Example 1: A factory worker in Maharashtra is currently paid ₹8,000 per month. If the Central Government fixes the floor wage at ₹9,000 per month, the factory must increase the worker’s wages to at least ₹9,000.
• Example 2: Kerala has a minimum wage of ₹10,000 per month for certain categories of workers. If the Central Government sets a floor wage of ₹8,500 per month, Kerala can continue with its higher minimum wage of ₹10,000, but it cannot reduce it below ₹8,500.