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LATEST NEWS UPDATES | Pan-India wage plan

Pan-India wage plan

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published Published on Jul 27, 2017   modified Modified on Jul 27, 2017
-The Telegraph

New Delhi: The Union cabinet today cleared a plan to introduce a pan-India minimum wage that will cover all sectors of the economy.

The Labour Code on Wages Bill seeks to empower the Centre to fix a universal minimum wage for workers across the country. The new law is expected to benefit over 4 crore employees across the country.

The Code will consolidate four different wage-related laws: the Minimum Wages Act, 1948, the Payment of Wages Act, 1936, the Payment of Bonus Act, 1965, and the Equal Remuneration Act, 1976.

The new code will also cover employees who draw more than Rs 18,000 a month who are currently outside the ambit of the Minimum Wages Act.

The bill is likely to be introduced in Parliament during the monsoon session which concludes on August 11.

The Centre will revise the national minimum wage every two years. The frequency of the wage revision could become every five years if dearness allowance is included in the wage.

Industry isn't too happy about the idea of a universal minimum wage. Assocham secretary general D.S. Rawat said: "It will hurt the small and medium enterprises and impact job creation. The wages in metropolitan cities and other cities cannot be the same as wages are paid based on the cost of living in the place."

States will have to adopt the suggested national minimum wage but will have the right to pass laws for a higher minimum wage, mirroring the situation in the US.

Under the US Fair Minimum Wage Act of 2007, the wage floor has been fixed at $ 7.25 per hour. However, states like Massachusetts and Washington have set a higher minimum wage at $ 11 per hour. New York City plans to raise its minimum wage to $ 15 per hour by the end of 2018.

In the UK, the minimum wage for workers above 25 years of age has been fixed at £ 7.50 per hour. There are three other age-related minimum wages in the UK: £ 7.05 for those between 21 and 24, £ 5.60 for those between 18 and 20, and £ 4.05 for those under 18. Apprentices must be paid at least £ 3.50 per hour.

"Several states have not revised the minimum wage for several years and it will be difficult for them to implement the Code," said Prof N.R. Bhanumurthy of the National Institute of Public Finance and Policy. "A universal minimum wage will be hard to implement as the cost of living varies across states."

The new minimum wage code will also seek to adopt a universal definition of the terms like wages and salaries. At present, employers across different sectors have to grapple with at least a dozen definitions of wage-related terms strewn across various Acts passed by the Centre and the states.

Please click here to read more.
 

The Telegraph, 26 July, 2017, https://www.telegraphindia.com/1170727/jsp/frontpage/story_164099.jsp


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