Minimum Wages Act 1948: Objectives, Provisions & Relevance

Published on 26 September 2025 by
Minimum Wages Act, 1948

The Minimum Wages Act, 1948 is one of the most important labour laws in India. It was enacted to ensure that workers are not exploited by being paid wages below a reasonable level. By giving statutory backing to wage standards, the Act aimed to provide workers with a minimum income necessary for a basic standard of living. It forms part of the wider framework of labour welfare laws that seek to balance the interests of employers and workers, and is considered a milestone in the history of social justice in India.

Background of the Minimum Wages Act, 1948

The Act was passed by the Parliament in 1948 and came into force on 15th March 1948. The idea of minimum wages had gained international attention after the International Labour Organization (ILO) stressed the need for wage protection in the 1920s. In India, the Fair Wages Committee set up in 1946 recommended that a law should be enacted to provide statutory minimum wages in industries where wages were very low. The Minimum Wages Act was therefore introduced to protect vulnerable sections of workers, particularly in unorganized sectors, and to ensure that they could maintain a basic standard of living.

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Objectives of the Act

The objectives of the Minimum Wages Act were focused on worker protection, fair remuneration, and industrial peace. These objectives can be explained as follows:

  • Ensuring minimum livelihood standards: The Act made sure that no worker was paid less than the minimum wage fixed by the government, thereby securing a basic level of income for survival.
  • Preventing exploitation of labour: Many workers were often paid very low wages. The Act provided legal protection to prevent such exploitation.
  • Promoting social justice: By providing a wage floor, the Act aimed at reducing inequalities and improving the welfare of the working class.
  • Supporting industrial peace: Fair wages helped reduce wage-related disputes between employers and employees, promoting better industrial relations.
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Applicability of the Act

The Minimum Wages Act applied to employments notified by the government in its schedule. It covered both skilled and unskilled workers, and the minimum wage varied based on skill, industry, and region. The applicability can be understood in the following points:

  • Scheduled employments: The Act applied only to those industries or occupations that were included in the schedule attached to the Act, such as agriculture, construction, textiles, and mining.
  • Central and state jurisdiction: The Central Government fixed minimum wages for employments under its authority (like railways, mines, and oilfields), while State Governments fixed wages for other employments within their territories.
  • Categories of workers: The Act covered workers at different skill levels such as unskilled, semi-skilled, and skilled, with different minimum wages notified for each category.

Key Definitions under the Act

The Act provided certain definitions to bring clarity about its scope and coverage. Some important ones include:

  • Minimum wage: The wage rate fixed by the appropriate government which must be paid to workers, including basic wage and allowances, but excluding bonuses and incentives.
  • Employer: Any person who employs workers directly or indirectly and is responsible for paying wages, including contractors and managers of establishments.
  • Employee: Any person employed in scheduled employment who is entitled to receive wages as per the Act.
  • Scheduled employment: Any employment specified in the schedule of the Act where the government has fixed minimum wages.
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Important Provisions of the Act

The Minimum Wages Act contained several important provisions that regulated how wages were fixed, revised, and paid. These provisions include:

  • Fixing of minimum wages: The appropriate government is empowered to fix minimum wages for different industries, regions, and categories of workers.
  • Revision of wages: Minimum wages must be reviewed and revised at least once every five years to adjust for changing economic conditions.
  • Payment in kind: While wages are normally to be paid in cash, the government can authorize payment in kind such as food or accommodation if necessary.
  • Working hours and overtime: The Act regulates working hours and requires payment of overtime wages for work done beyond the normal working day.
  • Enforcement authority: Inspectors are appointed to ensure compliance with the Act and to check wage registers maintained by employers.
  • Penalties: Employers who fail to pay minimum wages or violate provisions of the Act can face fines and imprisonment.

Amendments and Modern Relevance

The Minimum Wages Act was amended several times to expand its coverage and improve enforcement. Over the years, more employments were added to the schedule and wage levels were updated to reflect inflation and economic growth. The most important development came with the Code on Wages, 2019, which repealed the Minimum Wages Act along with three other wage laws. The Code introduced the concept of a national floor wage and extended coverage to all workers, not just those in scheduled employments. This shows that the principles of the Minimum Wages Act remain highly relevant even though the law has been replaced.

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Importance of the Minimum Wages Act, 1948

The Act played a crucial role in shaping India’s labour policy and ensuring fairness in wage distribution. Its importance can be explained as follows:

  • Worker protection: The Act guaranteed that workers were not paid below a certain minimum level, protecting them from exploitation.
  • Social and economic justice: By ensuring fair wages, the Act promoted social justice and helped in reducing income inequalities.
  • Improved industrial relations: It reduced disputes over wages and contributed to a more stable employer-employee relationship.
  • Foundation for wage policy: It laid the groundwork for India’s wage regulation system and paved the way for the Code on Wages.

Relevance for UPSC EPFO and Other Exams

For exams like UPSC EPFO, SSC, and State PSC, the Minimum Wages Act, 1948 is an important topic because it represents a landmark step in labour welfare. Questions may be asked about who fixes minimum wages, the meaning of scheduled employment, the frequency of wage revision, and enforcement authorities. Understanding this Act also helps in linking it with the Code on Wages, 2019, which is now in effect. For UPSC EPFO, it is important because it reflects how labour laws protect weaker sections of society and ensure fair working conditions.

FAQs

Q1. What is the Minimum Wages Act, 1948?
It is a law enacted to ensure workers receive at least the statutory minimum wage and are protected from exploitation.

Q2. Who fixes minimum wages under the Act?
The appropriate government—Central or State—fixes minimum wages for scheduled employments under its jurisdiction.

Q3. How often must minimum wages be revised?
Minimum wages must be reviewed and revised by the government at least once every five years.

Q4. What is scheduled employment under the Act?
It refers to industries or occupations listed in the Act’s schedule, such as agriculture, mining, textiles, and construction.

Q5. Is the Minimum Wages Act still in force?
No, it has been repealed and merged into the Code on Wages, 2019, but its principles remain highly relevant.