Lesson 4 of 10 · about 6 minutes

Minimum wages and paying wages

The minimum rate and the floor wage, when wages are due, what may be deducted, and equal pay for the same work.

Written from the official text · not reviewed by a lawyer · follows the Central Rules

Key points

  • No employer may pay any employee less than the minimum rate of wages notified by the appropriate Government s. 5.
  • Minimum rates are fixed by skill category (unskilled, semi-skilled, skilled, highly-skilled), geographical area, or both s. 6(6), and are to be reviewed or revised ordinarily at intervals of not more than five years s. 8(4).
  • No minimum rate may be lower than the floor wage fixed by the Central Government, and a rate already above the floor wage may not be reduced s. 9(2).
  • No wage period may be longer than a month s. 16.
  • Wages are due at the end of the shift for daily work, on the last working day of the week for weekly work, and before the end of the seventh day of the following month for monthly work s. 17(1).
  • When an employee is removed, dismissed or retrenched, resigns, or loses their job because the establishment closes, their wages are due within two working days s. 17(2).
  • Only the deductions the Code allows may be made, and all of them together may not exceed fifty per cent of the wages in any wage period s. 18(3); fines in one wage period may not exceed three per cent of the wages for that period s. 19(4).
  • There may be no discrimination on the ground of gender in wages for the same work or work of a similar nature s. 3(1), and no employer may reduce anyone’s wages to remove a difference s. 3(2)(i).

If you are an employer

  • Fix a wage period of a day, a week, a fortnight or a month for each employee s. 16, and pay within the time limit for that period s. 17(1).

If you are a worker

  • No fine may be imposed on an employee under the age of fifteen years, and a fine may not be recovered in instalments or after ninety days from the day it was imposed s. 19(5)–(6).

Try it

Check your understanding

7 questions. Choose an answer, then open “Show the answer” to check it against the law's own words.

  1. Question 1. Who notifies the minimum rate of wages that an employer must pay at least?
    Show the answer

    Answer: The appropriate Government

    No employer may pay an employee less than the minimum rate of wages the appropriate Government notifies s. 5.

    No employer shall pay to any employee wages less than the minimum rate of wages notified by the appropriate Government.
    The law's words: Code on Wages, s. 5 — Payment of minimum rate of wages
  2. Question 2. Which Government fixes the floor wage, below which no minimum rate may be set?
    Show the answer

    Answer: The Central Government

    The Central Government fixes the floor wage, taking into account minimum living standards of a worker s. 9(1).

    The Central Government shall fix floor wage taking into account minimum living standards of a worker
    The law's words: Code on Wages, s. 9 — Power of Central Government to fix floor wage
  3. Question 3. At what interval must the appropriate Government ordinarily review or revise minimum rates of wages?
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    Answer: Not more than five years

    Minimum rates are reviewed or revised ordinarily at an interval not exceeding five years s. 8(4).

    The appropriate Government shall review or revise minimum rates of wages ordinarily at an interval not exceeding five years.
    The law's words: Code on Wages, s. 8 — Procedure for fixing and revising minimum wages
  4. Question 4. An employee is paid by the month. By when must the employer pay the wages for a month?
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    Answer: Before the end of the seventh day of the following month

    Monthly wages are due before the expiry of the seventh day of the succeeding month s. 17(1)(iv).

    monthly basis, before the expiry of the seventh day of the succeeding month.
    The law's words: Code on Wages, s. 17 — Time limit for payment of wages
  5. Question 5. An employee resigns. Within how long must the wages payable to them be paid?
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    Answer: Within two working days of the resignation

    Wages are paid within two working days of a removal, dismissal, retrenchment or resignation s. 17(2).

    the wages payable to him shall be paid within two working days of his removal, dismissal, retrenchment or, as the case may be, his resignation.
    The law's words: Code on Wages, s. 17 — Time limit for payment of wages
  6. Question 6. What is the most that all deductions together may take from an employee's wages in a wage period?
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    Answer: Fifty per cent of the wages

    The total of the deductions in any wage period may not exceed fifty per cent of the wages s. 18(3).

    in any wage period from the wages of an employee shall not exceed fifty per cent. of such wages.
    The law's words: Code on Wages, s. 18 — Deductions which may be made from wages
  7. Question 7. To remove a difference in pay between women and men doing the same work, may an employer lower the higher wage?
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    Answer: No: the employer may not reduce the rate of wages of any employee to comply

    An employer may not reduce the rate of wages of any employee to comply with the rule against discrimination on the ground of gender in wages s. 3(2)(i).

    for the purposes of complying with the provisions of sub-section (1), reduce the rate of wages of any employee
    The law's words: Code on Wages, s. 3 — Prohibition of discrimination on ground of gender

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Guides

The provisions this lesson rests on

Supreme Court decisions under the earlier law

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Official text reproduced from the Gazette of India, India Code and State Government sources. This is not legal advice; check the source PDF before relying on any provision.