The Minimum Wages Act, 1948, (hereinafter referred to as “the Act”) was amended with respect to its application to the National Capital Territory of Delhi vide the Minimum Wages (Delhi) Amendment Act, 2017 (hereinafter referred to as “the Amendment”) and received the Hon’ble President’s assent recently. Amongst other things, the amendments which would have a significant impact are those related to more stringent punishments for offences, digitization of records and cashless payment of wages. Few of the important amendments are discussed below:

Conditions while fixing/ revising minimum rates of wages:

Section 4 of the Act deals with the fixing or revising the minimum rates of the wages. The Amendment requires the appropriate Government to take into consideration:

  • the skill required,
  • the arduousness of the work assigned to the worker,
  • the cost of living of the worker; and
  • other such components

while fixing or revising the minimum rates of wages.

Cashless payment of wages:

The Amendment requires that the wages to be paid through online transactions instead of cash payment in view of the national regime of going cashless. However, keeping into consideration that the daily wage labor class of people to whom these laws are applicable are dominantly dependent on cash transactions, the Amendment also prescribes 2 exceptions to the rule of online payment of wages:

  • In case of payment of wages to the workers employed on daily wages basis, not less than minimum wages as notified from time to time by appropriate Government; or
  • In case of special circumstances which are beyond the control of employer like- fire in the establishment, natural calamities, death of employer or director of the establishment and other such circumstances as prescribed by appropriate Government.

Overtime:

Earlier, the overtime rate was to be fixed by the appropriate Government. However, the Amendment fixes a minimum limit for the overtime rate which shall now not be less than 2 times of the normal rate of wages fixed under this Act or under any law of the appropriate Government for the time being in force, whichever is higher.

Penalties:

  1. Payment of wages less than the minimum wages to the laborer falling within the ambit of scheduled employment is an offence as per Section 22 of the Act. The Amendment has sought enhancement of punishment for this offence. The term of punishment has now been increased from 6 months to 3 years. The amount of maximum fine which may be imposed has also been increased from INR 500 to INR 50,000.
  1. Under Section 22A of the Act prescribes general punishment for the contravention of the Act where no other penalty has been prescribed. In such cases the penalty in the Act is only fine which may extend upto INR 500. However, after the amendment, the penalty will include imprisonment for a term of 1 year and/ or a fine which shall extend upto INR 20,000.

Disposal of cases:

By amending Section 22 B of the Act the Courts will now be required to dispose of the complaints made under Section 22 within 3 months of the date of making of the complaint

Digitization for recording information:

The employers are now required to upload the employee data on website or web portal in the manner as may be prescribed.