New statutory wage benchmark aims to strengthen minimum wage protection for workers.
Key Highlights
- The Centre has started the process of fixing India’s first statutory national floor wage.
- The move is being implemented under the Code on Wages, 2019.
- The Labour Ministry has begun consultations with states and will constitute the Central Advisory Board.
- States and Union Territories cannot set minimum wages below the national floor wage.
- Different floor wages may be notified for different geographical regions.
- The new framework will replace the existing non-binding National Floor Level Minimum Wage (NFLMW).
New Delhi: The Central government has initiated the process of fixing India’s first statutory national floor wage under the Code on Wages, 2019, marking a significant step towards creating a uniform minimum wage framework across the country.
The Ministry of Labour and Employment has started consultations with state governments and is preparing to establish the Central Advisory Board, which will assist in determining the floor wage.
Unlike the existing National Floor Level Minimum Wage (NFLMW), which serves only as a non-binding guideline, the new national floor wage will become a statutory benchmark. Once implemented, no state or Union Territory will be allowed to fix its minimum wage below the floor wage prescribed by the Centre.
Under Section 9 of the Code on Wages, 2019, the Central government will determine the floor wage after considering the minimum living standards of workers. The law also permits different floor wage levels for different geographical regions to reflect variations in living costs.
The proposed framework aims to improve wage protection for workers while allowing states to continue setting higher minimum wages based on local economic conditions and labour market requirements.
