India has begun a massive undertaking to reform and unify its labor law system. In India today, laws governing minimum wages can vary widely from state to state. In addition, only specified types of employment are covered by the statutory minimum wage, leaving many workers outside the protection of the law.
JVI’s work with bonded laborers in India often involves filing claims for unpaid wages under the current minimum wage laws. The legal code in effect today in India contains different classifications of job types and corresponding wage rates, existing side by side, creating a complicated tangle for employees and employers alike.
In an effort to simplify and expand labor protections in India, the Central Government is promulgating a new series of labor laws. Last August, the Code on Wages was signed into law. The Code is the first Act in a series of four that will replace forty-four Central Government laws that govern employment across the country, some of which are decades old. Once the Code is in effect, it will replace the 1948 Minimum Wages Act for which JVI’s Minimum Wage Toolkit serves as a guide. The second act is the Code on Occupational Safety, Health and Working Conditions. Future acts will update social security, industrial relations and other labor-related issues.
As many as 500 million Indian workers will gain statutory minimum wage protection under the new law, which also shortens the period of time employers have to pay out wages earned to their employees. The Code sets a floor for minimum wages for all workers across the country. States will still have power to pass laws that require higher wages but will not be able to set them below the Code’s floor.
Minimum wage rates in India are currently based on job types and sectors, but that system will change when the new law goes in effect. Instead, location and skills will be the basis for calculating wages. The forthcoming system is expected to be much simpler and straightforward. Critics warn that the simplification and changes in the inspection requirements may give the government less oversight.
Legislative reform is needed, but enforcement will be a key factor determining the impact in the lives of these 500 million people. Amidst these changes, JVI will continue to advocate alongside Indian workers for fair wages and working conditions.
JVI is following the reforms and will publish a new version of the Minimum Wage Toolkit with updated standard operating procedures as the legislation is further developed and put into place. Questions about making a claim under India’s labor law? Contact us at firstname.lastname@example.org