National benchmark will improve the salary threshold, bring in pay parity across the nation, says ministry
New Delhi: After months of deliberations, the labour ministry has moved a cabinet note seeking to set a mandatory national minimum wage and merge four wage-related laws into one.
Currently each state decides on the minimum wage in its jurisdiction. The ministry says a national benchmark will do away with discrepancies, improve the salary threshold and bring in a some pay parity across the country.
“We have sent the proposal to the cabinet,” said labour minister Bandaru Dattatreya. “I have completed tripartite talks (involving industry, labour unions and the government) and have got it cleared from the law ministry,” he said on the sidelines of an employees state insurance corporation event.
Once the proposal is approved by the cabinet and the draft law gets the parliamentary nod, the “national minimum wage will be fixed by the central government”. The states, however, will have the flexibility to offer more than the national minimum.
The minimum wage currently varies from Rs.4,500 to Rs.9,500 a month for unskilled workers in various states. The national minimum wage will be fixed for unskilled, semi-skilled and skilled employees. India’s labour market has more than 470 million workers and around 12 million are entering the labour force every year.
“National labour unions have been demanding a national minimum wage ofRs.15,000 per month for the past three to four years. And now the Seventh Pay Commission has suggested Rs.18,000 per month minimum wage for government employees. The labour ministry will now keep that in mind while deciding minimum wage,” said D.L. Sachdeva, national secretary of the All India Trade Union Congress.
Dattatreya expects to table the wage code bill in the ongoing Parliament session, which ends on 23 December.
The national minimum wage provision is part of the proposed wage code. The Minimum Wages Act, 1948, the Payment of Wages Act, 1936, the Payment of Bonus Act, 1965, and the Equal Remuneration Act, 1976 are being merged to create the wage code, Mint reported on 10 March.
It is part of a larger mission of the labour ministry to consolidate 44 central labour laws into five broad laws to ease compliance. The ministry and the Union government says simplifying labour laws will lead to an enabling environment for industrial growth, especially in the labour-intensive manufacturing sector.
Besides, the wage code also seeks to give a uniform definition of wage as “all remuneration (whether by way of salary, allowances or otherwise) expressed in terms of money or capable of being so expressed which would, if the terms of employment, express or implied, were fulfilled, be payable to a person employed in respect of his employment or of work done”. But the wage will exclude bonuses, house accommodation, travel allowance and gratuity payment by an employer.
This provision was opposed by both unions and employers’ federations during the consultation process as they believe that take-home pay will be affected because of the clubbing of the provisions.
The labour minister and the labour secretary declined to comment on this. “We are for development of all sections, employees and employers, and shall take everyone along,” labour secretary Shankar Aggarwal said.