Minimum wage fixation: Panel formed

The labour ministry on Thursday formed a committee that will look afresh at the minimum wage fixation formula keeping in view the cost to maintain a minimum living standard and also the size of an average family.

The Central Advisory Board under the Minimum Wages Act here on Thursday held a meeting, chaired by Labour Minister Bandaru Dattatreya.

The board comprises central government nominated persons representing employers and employees, industry stakeholders and trade unions.

After the meeting, Dattatreya said, "Taking into all the consideration, we have decided to constitute the committee that will look into minimum wage fixation. The employers have no objection to this as there is a need for a minimum living standard in the present day."

"The Central Advisory Board which advises on policy direction on minimum wages had not met for about 7 years. In Thursday's meeting, we discussed the implementation of minimum wages in various states, areas needing more refinement and how minimum wage calculation can be rationalised," Labour Secretary M Sathiyavathy briefed after the meeting.

There are several states that have not even constituted their respective state advisory boards to fix minimum wages, she said.

Minimum wages differ from state to state, for example, in Delhi, the state government has recently decided to hike the minimum wages for an unskilled worker to Rs 13,350 per month against Rs 9,724 per month earlier.

For semi-skilled and skilled persons, it has been increased from Rs 10,764 to Rs 14,698 and from Rs 11,830 to Rs 16,182 per month, respectively.

The labour secretary said the Centre can only advise states on fixing minimum wages while the onus of decision making lies entirely on their advisory boards.

"At the moment, there is no mandatory minimum wage that we can give. Some of the states have fixed minimum wages that are less than what we have advised. We can only have an advisory floor level minimum wage fixation but some of the states are even giving less than that," she added.

The three-unit based formula to fix minimum wages presently counts only four members of a family -- husband, wife and two children. It has no provision to count dependent parents, if any, or even if there are more than two children.

The three-unit formula gives the husband a full unit, wife 0.8 unit, and 0.6 units for each of the two children.

Based on the three-unit formula, the minimum wage is worked out taking into consideration the calorific value requirements of 2,700 each, a certain length of cloth requirement, housing rental value, education and medical expenses etc.

"Now the trade unions are saying that the three-unit system is not sufficient to decide minimum wages because the children continue to stay with the family for long periods.

The trade unions are saying that the two children and wife should be accorded one single unit," Sathiyavathy said.