Indian Government Proposes New Framework for Minimum Wage



On 10 July, the Indian Ministry of Labour and Employment notified the draft Code on Wages (Central) Rules, 2020. The government has invited public suggestions before the final draft Rule is drawn.

One of the main changes is to propose a new framework to calculate the minimum wage rate as well as reducing normal working hours from 9 to 8 hours. Minimum wages would be fixed by considering criteria such as food, clothing, housing and any other factors decided by the central government. In addition, the minimum wage framework will also take into account three geographical areas - metropolitan areas, non-metropolitan areas and rural areas.

The notification will affect approximately 500 million workers in India. However, the draft notification Code on Wages (Central) Rules, 2020 will not affect the provisions in the Factories Act, 1948. Earlier this year a few Indian States moved to increase the legal working hours in factories from eight to twelve hours for three years.

If implemented, there would be two different sets of legal provisions specifying permissible working hours at Central and State levels, as stated within the provisions of the Factories Act and the Code on Wages (Central) Rules, 2020.

amfori’s position paper ‘Post-lockdown Labour Rights: Recovering with purpose’ urges governments to adopt a long-term perspective in times of crisis, placing sustainability concerns at the heart of recovery plans.

Read more: amfori’s Living Wage Journey