Minimum Wages Act, 1948

September 08, 2025

1. Objective

The Minimum Wages Act, was enacted to address the challenges of low wages and worker exploitation in India. The Act aims to ensure fair compensation by establishing minimum wage standards in specific employments. Its primary objectives are to enhance the standard of living for workers, prevent exploitation, and promote social and economic justice

2. Applicability

The Act, extends across the entire country and applies to workers employed in various Scheduled Employments, as specified by the government. These include:

• Agriculture – Farming, plantation, horticulture, and related activities.
• Construction & Maintenance –Building, road, and infrastructure projects.
• Manufacturing & Processing –Factories, textile mills, and small-scale industries.
• Mining & Quarrying –Extraction of minerals, stones, and related activities.
• Brick Kilns & Stone Crushing –Operations involving brick and stone production.
• Loading & Unloading Work –Activities in docks, warehouses, and transport hubs.
• Sweeping & Cleaning –Employment in municipal and private sanitation services.
• Hotels, Restaurants & Catering – Hospitality sector workers.
• Shops & Commercial Establishments – Retail, trade, and business employees.
• Domestic Work – Household workers, including cleaners and caretakers.
• Handloom & Power Loom Industry –Weaving and textile production workers.
• Other notified industries – As determined by state or central authorities.

3. Fixation of Minimum wages with an example

Under the Minimum Wages Act, 1948, there is no uniform wage rate applicable across the entire country. Instead, minimum wages vary from state to state, as the Act empowers the appropriate government—either the Central Government or the respective State Government—to fix and revise the minimum rates of wages for different scheduled employments.

As per Section 3 of the Act, the appropriate government is responsible for:

• Fixing Minimum Wages: Prescribing minimum wage rates for different categories of employment, taking into account factors such as the cost of living, nature of work, and skill level.
• Periodic Revision: Reviewing and revising the minimum rates of wages at such intervals as it may think fit, provided that such intervals do not exceed five years, to ensure that wages remain fair and adequate for workers.

Since economic conditions, living costs, and employment structures vary across states, the minimum wage rates are determined accordingly, ensuring that workers receive wages that reflect regional conditions.

Let us take a look into the Minimum wage rates of Maharashtra, Karnataka and Telangana

Maharashtra:

The following rates of minimum wages will be applicable in respect of Unskilled, Semiskilled and Skilled categories in all Scheduled Employees: Effective from date 01-01-2025

Karnataka:

Effective from date 01-04-2025

The applicable rates of minimum wages are as follows:

Telangana:

Effective from 01-10-2024

The applicable rates of minimum wages are as follows:

4. Impact of employees on contract basis

The responsibility for paying wages to contract workers primarily lies with the contractor who employs them. The contractor must ensure that workers receive wages not less than the prescribed minimum wages set by the appropriate government.

However, if the contractor fails to pay the minimum wages or defaults on wage payments, the principal employer—the entity that has engaged the contractor—bears the ultimate responsibility. In such cases, the principal employer is obligated to ensure that workers receive their rightful wages and may be held liable for non-compliance. Failure to comply can result in legal penalties.

5. Penalties for Non-Compliance

Any employer who:

(a) Pays an employee less than the prescribed minimum wages for their category of work or fails to pay the amount due under this Act, or

(b) Violates any rule or order issued under Section 13, Shall be subject to punishment, which may include imprisonment for up to six months, a fine of up to five hundred rupees, or both. However, penalties may vary from state to state. For Example, The fines in Karnataka may potentially range from a minimum of Rs. 5,000 to Rs. 10,000 or even up to Rs. 1 Lakh.

Provided that, while imposing a fine for an offence under this section, the Court shall consider any compensation already awarded against the accused in proceedings under Section 20.

6. Conclusion:

By understanding the Act’s provisions, our clients can ensure compliance with minimum wage regulations, avoid penalties, and foster fair labour practices.

For businesses employing contract workers, this newsletter highlights the responsibilities of both contractors and principal employers, helping our clients mitigate risks associated with non-compliance.

At B C Shetty and Co., we help our clients understand and follow labour laws effectively. Staying informed and ensuring fair wages can improve employee satisfaction, ensure legal compliance, and promote ethical employment practices.