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Section 4 of Minimum Wages Act, 1948

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Section 4 of Minimum Wages Act, 1948 deals with minimum rates of wages.

  • The minimum rate of wage may consist of:
    • Basic rate of wages and a special allowance at a rate to be adjusted a such intervals and manner as appropriate Government may direct
    • Basic rate of wages with or without cost of living allowance, and the cash value of concession in respect of supplies of essential commodities at concession rates, where so authorized
    • An all-inclusive rate allowing for the basic rate, the cost of living allowance and the cash value of the concessions
  • Section 4(2) says the authority under the appropriate Government shall compute the Cost of living allowance and cash value of concessions of supply of essential commodities.

Irrelevant considerations for fixing minimum wages

  • Employer is finding difficult to carry business on basis of minimum wages
  • Financial capacity of the employer
  • Financial loss by the employer in the previous year
  • Employer finding it difficult to import raw materials
  • Regional / Industry principles

Related Cases

  • Employers vs State of Andhra Pradesh (1994): Government is right in fixing minimum wages based on the cost of living index.
  • Mahendra Chandra vs State, AIR 1971 Tri 32: 'Special allowance' defined in Section 4(1) is a variable amount and is part of wages, being linked with the cost of living index number. 'Trip allowance' is not a part of 'Special allowance' because trip allowance has nothing to do with cost of living index number.
  • Karnataka Film Chamber of Commerce vs State of Karnataka (1987) I LLJ 182 (Karn): The language in the section does not lend itself to the interprettation that a minimum wage under Section 4(1) necessarily should consist of basic wages and dearness allowance.
  • Jaswant Rai Beri vs State of Punjab AIR 958 Punjab 405
  • Karmani Metals and Alloys Ltd vs Workmen, AIR 1967 SC 1175: Minimum wages must be paid irrespective of the extent of profits, financial condition of the establishment or the availability of workmen, on lower wages.

See Also