The Government’s proposed decision of making a hike in the mandatory national minimum wage is a form of social security to millions of domestic workers ahead of general elections set for April-May. The proposed decision could be a step toward universal welfare payments as envisaged under the Social Security Code, 2020, which has not been rolled out yet.
With approximately 500 million workers, 90 percent of whom are in the unorganised sector, the current floor wage stands at ₹176 per day, last revised in 2017. This rate is not statutorily binding for states.
The Government of India is considering a mandatory national minimum wage hike, potentially impacting 500 million workers. The proposed decision is made as the current floor wage (Rs 176/day, set in 2017) is seen as inadequate due to rising living costs and inflation. The proposed new wage on implementation would be mandatory across states and could arrive before the upcoming April-May.
In 2019, a recommendation was made by a committee led by Anoop Satpathy which suggested that the floor wage of ₹375 per day, a proposal rejected by the government due to substantial financial implications for employers. We can hope that the current committee will strike a balance between the existing ₹176 per day and the previous ₹375 per day recommendation.
As per the Code on Wages, 2019, the Government has the authority to set different floor wages for various geographical areas. However, it prohibits reducing wages if the minimum rates set by the appropriate government exceed the existing floor wage.
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