What is Minimum wages?

Definition

Minimum wages are the floor rates of pay fixed by government for scheduled employments, varying by state, by occupation, by skill level and often by geographic zone within a state.

How it works

There is no single national minimum wage figure in India. Rates are notified separately, usually revised periodically with a variable dearness allowance component, and the rate that applies depends on which scheduled employment the work falls into and which skill category the worker sits in.

What it means in India

Rates are fixed under the Minimum Wages Act 1948 by the appropriate government, which is the state for most private employment, and are commonly notified as a basic rate plus a variable dearness allowance revised at intervals. Two workers doing different jobs in the same shop can be entitled to different minimums, and the same job in two zones of one state can carry two rates.

What people get wrong

• Using one figure for the whole company. Skill category and zone both change the rate.
• Not tracking revisions. Rates are revised periodically and paying last year notified rate is a shortfall, not a rounding.
• Assuming a salary comfortably above the minimum settles the question, without checking that the components counted towards it are the ones the notification allows.

Terms this one depends on

More on statutory deductions and benefits

Where this shows up in practice

Almost everything on this page ends up as a line on a payslip or a figure in a register. Shiftelio keeps attendance, leave, salary structure and the statutory deductions in one place, so the number in the letter and the number in the payslip come from the same record.