From UPSC perspective, the following things are important :
Prelims level : Minimum Wages. MGNREGS
Mains level : Read the attached story
New Code on Wages Bill
- The Union Cabinet has cleared the new version of Code on Wages Bill, which seeks to define the norms for fixing minimum wages.
- It will be applicable to workers of organised and unorganised sectors, except government employees and MNREGA workers.
- It will amalgamate the Payment of Wages Act, 1936, the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965, and the Equal Remuneration Act, 1976.
New determining factors of wages
- As per the Bill, minimum wages will be linked only to factors such as skills and geographical regions.
- At present, minimum wages are fixed on the basis of categories such as skilled, unskilled, semi-skilled, high skilled, geographical regions, and nature of work such as mining.
- These are applicable for 45 scheduled employments in the central sphere and 1709 scheduled employments in states.
- This is expected to effectively reduce the number of minimum wage rates across the country to 300 from about 2,500 minimum wage rates at present.
- A National Floor Level Minimum Wage will be set by the Centre to be revised every five years, while states will fix minimum wages for their regions, which cannot be lower than the floor wage.
- The current floor wage, which was fixed in 2017, is at Rs 176 a day, but some states have minimum wages lower than it such as Andhra Pradesh (Rs 69) and Telangana (Rs 69).
- An effective minimum wage policy is a potential tool not only for the protection of low paid workers but is also an inclusive mechanism for more resilient and sustainable economic development.
- A simple, coherent and enforceable Minimum Wage System should be designed with the aid of technology as minimum wages push wages up and reduce wage inequality without significantly affecting employment.