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National Floor Level Minimum Wage

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National Floor Level Minimum Wage is the minimum wage below which no state Government in India can fix the minimum wage.

Unlike the concept of “minimum wage” this is a non-statutory measure to ensure upward revision of minimum wages in different in States/UT’s. Thus, the State Governments are persuaded to fix minimum wages such that in none of the scheduled employments (those employments which are by law, liable for payment of minimum wages), the minimum wage is less than the National Floor Level Minimum Wage. This method has helped to some extent in reducing disparity among different rates of minimum wages existing in various states. Rates are revised periodically.

The Central Government has fixed the National Floor Level Minimum wage at Rs 160.00 per day with effect from 1 July 2015. This is the minimum wage fixed irrespective of any kind of schedule of employment both at centre and state level. 

There is disparity in rates of minimum wages in various regions of the country. This is due to differences in socio-economic and agro-climatic conditions, prices of essential commodities, paying capacity, productivity and local conditions influencing the wage rate. The regional disparity in minimum wages is also attributed to the fact that both the Central and State Governments are the appropriate Government to fix, revise and enforce minimum wages in scheduled employments in their respective jurisdictions under the Act.

For instance, as per the 2013 Report on the Working of the Minimum Wages Act, 1948, amongst the States, the average highest minimum wage reported is Rs. 382.50 in case of Kerala. The scheduled employment of River Sand Collection, its loading and unloading in the state of Kerala fetches the highest minimum wages @ Rs. 532.50 and the lowest minimum wage of Rs. 55.00 are being paid in the scheduled employment of Agriculture (Yanam region) in Puducherry. Further, while Assam has notified the maximum numbers of scheduled employments (105) the minimum number (1) was reported from Mizoram.

In order to have a uniform wage structure and to reduce the disparity in minimum wages across the country, a concept of National Floor Level Minimum Wage was mooted on the basis of the recommendations of the National Commission on Rural Labour (NCRL) in 1991. Keeping in view the recommendation of NCRL and subsequent rises in price indices, the National Floor Level Minimum Wage was fixed at Rs.35/- per day in 1996. This is revised periodically. There is also a demand to incorporate the provision of National Floor level Minimum wage into the Minimum Wages Act, 1948.

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