Terming the current minimum wage fixing criteria in the draft minimum wage rules as ambiguous, the International Labour Organization (ILO) in a discussion paper has called for refining of the rules and suggested relying on the evidence-based approach as suggested by the expert committiee on determining the methodology for fixing the national minimum wage earlier.
“The wage rules do not outline the exact criteria and methods for fixation of floor wage rates by the Central Government, except for stating some broad components such as food, clothing, housing and any other factors … India, with more than 70 years of experience in implementation of minimum wage regulation and 24 years of implementing the NFLMW, cannot afford to leave the floor wage fixation criteria ambiguous in the wage rules,” the paper, co-authored by ILO Wage Specialist Xavier Estupiñan, VV Giri National Labour Institute’s faculty Anoop Satpathy and Indian Economic Service officer Bikash K. Malick, said.
The Expert Committee had earlier recommended setting the national floor wage at Rs 375 per day (Rs 9,750 per month) as per July 2018 prices, which if now updated to January 2020 prices, will be Rs 413 per day (10,738 rupees per month), it said. The committee had based its recommendation on evidence of intake of 2,400 calories, 50 grams of protein and 30 grams of fat per day per person for the cost of a food basket and recommended five regional floor wages.
“It is crucial to have a closer look at this report and incorporate its recommendations as appropriate in the wage rules stating the exact methods of fixation of floor wage. This would enable the setting of the floor wage at an appropriate level after the wage code takes effect and would facilitate gradually catching up with the central trade unions’ demands to set the national floor at Rs 18,000 per month,” it said.
It has also called for fixing the periodicity of revision of the minimum wage. Of the two components of the minimum wage — basic wage and dearness allowance — the paper suggests revision of the basic wage every five years, a part which is missing in the proposed minimum wage rules.
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