Government to replace minimum wage with living wage by 2025
India plans to transition to living wages by 2025 with ILO' ssupport.
As reported by Economic Times, India approached ILO for capacity building, data collection, and demonstrating the positive economic impacts of living wages.
Key technical terms:
“Every worker has a right to a wage adequate to maintain a reasonable standard of life, having regard to the civilisation of his time and country”.(Point 4. – The Principle of the Minimum Wage - ILO )
The principle of a living wage for all workers – that is, a wage sufficient to maintain, in the circumstances of each country, an adequate standard of life. ( ILO )
The ILO approved this reform during its recent governing body meeting in Geneva.
International Labour Charter:
In any case in which wages are insufficient to secure a normal standard of comfort and in which it is impossible to secure an agreement between workers and employers the Government shall set up joint commissions to establish minimum wages.( Point No. 10, International Labour Charter )
The idea of securing a normal standard of comfort found somehow its way into the adopted text, but the proposal of setting up joint commissions to establish minimum wages when workers and employers fail to reach an agreement, was not retained by the Commission.
Indian Scenario:
The Code on Wages, 2019, has been notified on 08 August 2019, and the provisions of the Payment of Wages Act, 1936, the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965 and the Equal Remuneration Act, 1976, have been rationalised and subsumed therein. The Code provides for universal minimum wage across employments in organized and unorganized sector. The Code mandates the Central Government to fix floor wage and that the minimum rates of wages fixed by the appropriate Governments shall not be less than the floor wage. The Code prohibits gender discrimination in matters related to wages and recruitment of employees for the same work or work of similar nature done by an employee. Every employee, drawing wages not exceeding a monthly amount as notified by the Central or State Government, and having put in at least 30 days of work in an accounting year, will be entitled to an annual bonus at the rate of 8.33% of wages earned or Rs. 100, whichever is higher.
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