Wage Concepts

Wages means all remuneration (salary, allowance etc) expressed in terms

of money.
It also includes:
Any remuneration payable under any award or settlement between the parties or
order of court.
Any additional remuneration payable under the terms of employment such as bonus
and any sum by reason of termination of employment of person employed is
payable under the law or contract of service.

The term wages may be used to describe wage rates, straight-time

average/hourly earnings, gross average hourly earnings, weekly take-home
pay and annual earnings. Other types of benefits as well as pensions,
welfare funds, social security, vacations and holidays, are regarded as
fringe benefits. They are paid in addition to wages and form part of the
total labour costs.
To cultivate harmonious industrial relations the government (by enacting
suitable labour legislations establishing wage boards etc), the employers
and trade unions (by collective bargaining agreements) and the industrial
jurisprudence (by giving suitable awards) have tried to implement a fair
and reasonable wage structure for the country based on wage differentials.

Minimum Wages
A minimum wage is the lowest hourly, daily or monthly remuneration
that employers may legally pay to workers. The conception of minimum
wages is based on the principles of equity and social justice. Its
underlying idea is that he who works is entitled to a fair remuneration
which may enable him to live a life consistent with human dignity.
Several countries have enacted a statutory minimum wage rate that
sets a price floor for certain kinds of labor. Legislative protection for
workers to receive a minimum wage, can be considered as the hall
mark of any progressive nation. It is one of the fundamental premises of
decent work. In India, the Minimum Wages Act, 1948 provides for
fixation and enforcement of minimum wages in respect of scheduled
employments.
The Act aims to prevent sweating or exploitation of labour. The Act also
requires the appropriate government (both at Centre and States) to fix
minimum rates of wages in respect of employments specified in the
schedule and also review and revise the same at intervals not
exceeding five years.
With effect from November 2009, the National Floor Level of Minimum
Wage has been increased to Rs 100 per day from Rs 80 per day (which
was in effect since 2007).

Need-based Minimum wage

i.In calculating the minimum wage, the standard working-class

family should be taken to consist of three consumption units
for one earner; the earnings of women, children and
adolescents should be disregarded.
ii. Minimum food requirements should be calculated on the
basis of a net intake of 2700 calories for an average Indian
adult of moderate activity.
iii. Clothing requirements should be estimated at per capita
consumption of 18 yards per annum which could give for the
average workers family of four, a total of 72 yards.
iv. In respect of housing, the norm should be the minimum
rent charged by Government in the any area for houses
provided under the subsidized industrial housing scheme for
low-income groups; and
v. Fuel, lighting and other miscellaneous items of expenditure
should constitute 20 per cent of the total minimum wage.

Living Wage

Living wage as that appropriate for the normal needs of

the average employee, regarded as a human being living
in a civilised community. i.e. The living wage must
provide not merely for absolute essentials such as food,
shelter and clothing but for a condition of frugal comfort
estimated by current human standards.
There are three possible ways of obtaining
indication as to what constitutes a living wage.

some

(i) It should be sufficient to purchase the minimum theoretical

needs of a typical family, calculated in accordance with some
more or less scientific formula.
(ii) It should be sufficient to pay for a satisfactory basic budget,
as revealed by a survey of actual family expenditures.
(iii) It should be comparable with a living wage already
established in similar circumstances.