Minimum Wages Act, 1948

Definition

The Minimum Wages Act, 1948 is a central labour legislation that mandates the payment of minimum wages to employees engaged in scheduled employments, a list of industries and occupations specified in the Act for which minimum wages must be fixed by the appropriate government (central or state). The Act requires the central government to fix minimum wages for scheduled employments in establishments under its jurisdiction (primarily central government undertakings and railways), while state governments fix minimum wages for all other scheduled employments within their territories. Minimum wage rates vary significantly across states and across categories of workers (unskilled, semi-skilled, skilled, and highly skilled), geographic zones (urban, semi-urban, rural), and scheduled employment sectors. As of early 2026, minimum wage rates in India range from approximately Rs 300 to Rs 700+ per day depending on the state, zone, and skill category.

The Central Government revises the National Floor Level Minimum Wage periodically, which serves as a floor below which no state government can fix minimum wages. The minimum wage notification system has been criticized for its complexity, with thousands of different minimum wage rates across states, sectors, skill levels, and zones, multi-state employers face enormous complexity in ensuring compliance. Employers in scheduled employments must maintain a Register of Wages (Form II) showing wages paid to each worker, display minimum wage rates in a prominent place in the establishment, and pay wages at rates not below the minimum wage notified for the applicable employment category. Violation of minimum wage payment obligations is cognizable and compoundable and attracts imprisonment of up to six months and/or a fine.

The Code on Wages, 2019 is set to replace the Minimum Wages Act along with the Payment of Wages Act, 1936, the Payment of Bonus Act, 1965, and the Equal Remuneration Act, 1976. The Code on Wages introduces a Universal Minimum Wage applicable to all workers regardless of whether they are in a scheduled employment, a significant expansion from the current Act which covers only scheduled employments. The Code also introduces the concept of a national floor wage below which no state can fix minimum wages, streamlines the compliance process, and reduces the penalty structure. However, as with the other three labour codes, the Code on Wages has been passed but not yet notified into force as states finalize their implementation rules.

Key Points

• Minimum wages are fixed by central and state governments for scheduled employments and vary significantly by state, sector, skill category, and geographic zone.
• Employers must maintain Form II (Register of Wages), display applicable minimum wage rates prominently, and pay workers at or above the notified minimum rates.
• The National Floor Level Minimum Wage sets a base below which no state can fix minimum wages, providing a national baseline for worker protection.
• Non-payment of minimum wages is a cognizable and compoundable offence attracting imprisonment up to six months and/or fines under the Act.
• The Code on Wages, 2019 (not yet notified) will replace the Minimum Wages Act and extend the universal minimum wage protection to all workers, not just those in scheduled employments.
• Multi-state employers must track thousands of individual minimum wage notifications to ensure compliance across all applicable states and employment categories.