Two-thirds of the Indian population is impoverished. 68.8% of the Indian population lives on less than $2 a day. Over 30% live on less than $1.25 per day, classifying them as extremely poor. In India, almost 800 million people are classified as poor. The majority of them live in the countryside and make ends meet by working odd jobs.
Because of poverty, many workers are in danger of being exploited by their employers. The Minimum Wage Act addressed serious challenges that can jeopardize wage workers' integrity.
The Indian Parliament passed the Minimum Wage Act of 1948 on March 15, 1948. They implemented the Act in every state in the country. This post will learn about the minimum wages, the Chhattisgarh Minimum Wage Rules, payroll management, and much more.
Here are the points covered in this article:
- What is the Minimum Wage?
- Objective and Significance of Minimum Wage
- What is India National Level Floor Minimum Wage?
- How is minimum wage calculated?
- What are the Chhattisgarh Minimum Wage Rules?
- Table for Latest Minimum Wage in Chhattisgarh
- Payroll Management
Let’s get started!
What is Minimum Wage?
According to the International Labour Organisation, Minimum wage can be defined as "The bare minimum of payment that an employer is compelled to pay wage workers for labour accomplished over a certain period, which cannot be decreased by collective bargaining or individual contracts."
What does this mean?
It means that an employer must pay the minimum wage set by the state at all costs to a worker for a specific period. The minimum wage can be determined by an appropriate authority, a statute, a pay commission, the courts, or labour courts.
The purpose of instituting a minimum wage is to safeguard employees from being paid exploitative and overly inadequate salaries. Consequently, everyone gets a fair part of the industry's prosperity and success. Furthermore, this guarantees that a livable wage is provided to everyone working and requires it.
The minimum wage was created to allow workers to pay for these additional essentials, in addition to their fundamental needs such as health care and shelter.
Now, let's look in detail at the main objectives and the significance of the minimum wage.
The Objective and Significance of Minimum Wage
The goal of the minimum wage act is to guarantee that no employee or worker is exploited in terms of remuneration by the employer. As a result, it seeks to eliminate any instances of workers being paid excessively low pay.
The minimum wage legislation combats social disparities by focusing on the salary difference between men and women. The basic goal of minimum wages is to alleviate poverty and assist people in earning the pay they deserve.
The main objectives of the minimum wage are-
- Ensure that wages are proportionate to the amount of work done.
- Improve Society by Reducing Poverty
- Protecting workers against employment
- Encourage Pro-Employment Policies
Now, what is the significance of the minimum wage?
Or in other words, why do we need to fix the minimum wage?
Minimum wages are widely recognized worldwide as a critical tool for eradicating poverty and, just as importantly, safeguarding the viability of any economy.
For example, following the 2008 global financial crisis and the erosion of purchasing power globally, the International Labour Conference's Global Jobs Pact of 2009 identified "regular adjustment of wages, in consultation with social partners" as a means of reducing inequality, increasing demand, and contributing to economic stability.
Next, we will look at how the minimum wage is calculated, but before that, we need to understand what "National Level Floor Minimum Wage" means.
What is India’s National Level Floor Minimum Wage?
The national government established the National Floor Level Minimum Wage (NFLW) in 1996. A National Floor Level Minimum Wage is the lowest price at which a state government can set the minimum wage.
The Minimum Wages Act of 1948, passed a year after India's independence, provided a standard for minimum wages. However, numerous states continued to set separate minimum rates for different job categories and people, resulting in huge wage disparities across geographical areas.
As a result, to create a consistent wage structure and decrease disparities in minimum salaries, the government implemented the NFLW in 1996, based on the National Commission on Rural Labour (NCRL) recommendations in 1991.
In 1996, the National Floor Level Minimum Wage was set at Rs 35 per day, and it has since been updated regularly. Following adjustments, it was set at Rs 100 in 2009 and Rs 176 in 2017.
Now, we understood the national floor-level minimum wage, and next, we will see how the minimum wage is calculated.
How is Minimum Wage Calculated?
The Central Advisory Council established the Tripartite Committee on Fair Wages in 1948. The committee mentioned above had established a minimum wage requirement. This criterion specifies five elements that must be considered when determining the minimum wage. These are the following:
- 3 consumption units per earner;
- The average adult needs 2700 calories per day
- A family's clothing demand is 72 yards per year
- Rent for a house with a minimum area supplied under the government's Industrial Housing Scheme;
- Fuel, lighting, and other additional expenses should account for 20% of the total minimum wage
Furthermore, the appropriate government has the authority to set minimum wage rates. It can set the minimum wage too.
- by the hour,
- by day, or
- monthly; or
- by such a long wage term as may be specified
Sections 3 and 5 of the Act discuss the minimum wage determination and the mechanism for determining the minimum pay, respectively. Because minimum wages contain several of the factors stated above, they also include industrial dearness allowances for all industrial employees covered by the Act.
Let's now look at the Chhattisgarh Minimum Wage Rules.
What are the Chhattisgarh Minimum Wage Rules?
The Chhattisgarh government has implemented the Minimum Wages Rules for the proper administration and monitoring of the Minimum Wages Act, 1948. The Chhattisgarh Minimum Wage Rules establish the rules and principles that businesses in Chhattisgarh must follow in the scheduled employment scenario. It is commonly referred to as "rules" and is based on the "Act," the Minimum Wage Act of 1948.
Applicability
- The Act applies to the work schedule for which minimum wages are set or revised
- Every employer must pay the minimum wage for the scheduled jobs under this Act. In addition, there is a provision for establishing work hours, overtime, and overtime pay
- The variable DA is set depending on the prior calendar year's consumer price index
- In Chhattisgarh, minimum wages are set at the suggestion of the Chhattisgarh Minimum Wage Advisory Board
The document is divided into seven parts, each of which covers a different component of the planned employment, such as:
- Wages
- Men's, women's, children's, and teenagers' work hours
- Weekly offs and relaxation periods or intervals
- Wages for overtime
- Employers are responsible for keeping inspection registers
However, the following points are only a summary of the whole set of regulations under the Act. All businesses must learn and apply these concepts to ensure a favorable and healthy working environment.
The text emphasizes the need to maintain a healthy environment at the workplace so that no employee feels abused or demoralized by their earnings. The act's goal is to ensure that all employees, regardless of gender, receive the right and proportional salaries, thus guaranteeing social harmony.
Table for Latest Minimum Wage in Chhattisgarh
The latest minimum wage came into effect on October 1, 2021. Here is the updated list of the minimum wage in Chhattisgarh:
In calculating the amount due to employees, government rules must be followed. Payroll should be included in the payroll process in India while making employee payments. The salary is based on an 8-hour shift. Furthermore, overtime pay is done under the rules.
Wage increases for workers in India will be reflected in the basic plus delayed allowance column (Basic + DA). Workers will be paid once additional components such as taxes, bonuses, allowances, arrears, TDS, deductions, and so on have been considered.
Now, let us look at what payroll management is and can Deskera help you with the same.
Payroll Management
With payroll management software, you can streamline and consolidate your organization's compensation payments. In other words, the application automatically determines salaries, tax deductions, incentives, and bonuses, manages payments and deductions, and digitally stores them in its database.
Payroll Management by Deskera
Payroll and staff management are critical components of every business. Deskera People is an excellent option if you seek a comprehensive and automated application to manage payroll, personnel, costs, and contractor administration.
Employee management requires tremendous efforts. The software allows you to conveniently manage leave, attendance, payroll, and other expenses. Generating payslips for your employees is now easy as the platform also digitizes and automates HR processes.
Frequently Asked Questions
Following, we have answered some of the important FAQs related to the Chhattisgarh Minimum Wages Rules and Payroll:
Ques- 1 Who is covered by the Chhattisgarh Minimum Wages Rules?
- The Act applies to those who work in scheduled jobs or a certain type of work for which a minimum wage has been established.
- No employee may give up their rights by contract or agreement that claims to diminish the minimum pay rates established by the Act.
As a result, any contract or agreement formed for less than the established minimum wage is null and void.
Ques-2 What is the definition of wages under Chhattisgarh Minimum Wages Rules?
"Wages" is any remuneration capable of being stated in terms of money that would be paid to a worker appointed for his employment or work done in such employment if the requirements of the contract of employment, express or implicit, were met, excluding additional allowances.
Ques-3 What is payroll?
Payroll is the remuneration a company must pay to its employees for a specified period or on a specific day. It is often administered by a company's accounting or human resources department. However, payroll for a small firm may be directly controlled by the operator or an assistant.
Ques-4 What is VDA?
Variable Dearness Allowance (VDA) is the net amount earned following an increase or reduction in the consumer price index (CPI). It is where the workers' dearness allowance is computed and updated.
Key Takeaways
We've finally arrived at the end of this article. Let's look at some crucial information we covered in this article.
What is the Minimum Wage?
The bare minimum amount of payment that an employer is compelled to pay wage workers for labour accomplished over a certain period cannot be decreased by collective bargaining or individual contracts.
Objective and Significance of Minimum Wage
The main objectives of the minimum wage are-
- Ensure that wages are proportionate to the amount of work done.
- Improve Society by Reducing Poverty
- Protecting workers against employment
- Encourage Pro-Employment Policies
By raising minimum salaries, workers will overcome poverty and eradicate injustice.
What is India National Level Floor Minimum Wage?
The National Floor Level Minimum Wage is the lowest wage that a state government cannot set as the minimum wage.
How is minimum wage calculated?
Sections 3 and 5 of the Minimum Wage Act, respectively, address the minimum wage calculation and the process for establishing the minimum pay. Because minimum wages encompass some of the elements mentioned above, they also include industrial dearness allowances for all industrial employees covered by the Act.
What are the Chhattisgarh Minimum Wage Rules?
The Chhattisgarh government has implemented the Minimum Wages Rules for the proper administration and monitoring of the Minimum Wages Act, 1948. The Chhattisgarh Minimum Wage Rules establish the rules and principles that businesses in Chhattisgarh must follow in the scheduled employment scenario. It is commonly referred to as "rules" and is based on the "Act," the Minimum Wage Act of 1948.
Table for Latest Minimum Wage in Chhattisgarh
The latest minimum wage came into effect on October 1, 2021. Here is the updated list of the minimum wage in Chhattisgarh:
You can streamline and unify your organization's compensation payments with payroll management software. In a nutshell, the software automatically calculates wages, tax deductions, incentives, and bonuses, manages payments and deductions, and digitally keeps them in its database.
Related Articles
RVJ
Deskera Content Team
Deskera Content Team
Deskera Content Team
