- The norms for determining the minimum wage were recommended by the Indian Labour Conference in 1957, which decided that the minimum wage should be need-based, and should ensure the minimum human needs of the industrial worker.
Five norms were suggested:
- In 1991, the Supreme Court, in Raptakos & Co. Vs Its workers, ruled that children’s education, medical requirement, minimum recreation including festivals, ceremonies, provision for old age and marriage, should constitute 25%, and be used as a guide for fixing the minimum wage.
- These six criteria are considered by the central and state governments to fix the minimum wage. The minimum wages include basic and variable dearness allowance, which is revised twice a year based on Consumer Price Index (Industrial Worker).
- Based on the recommendations of the National Commission on Rural Labour in 1991, a National Floor Level Minimum Wage was proposed in order to have a uniform wage structure across the country. In 1996, the National Floor Level Minimum Wage was fixed at Rs 35 per day, which was revised in subsequent years and currently stands at Rs 160 per day. Since the the National Floor Level Minimum Wage does not have statutory backing, it is not mandatory for states — although they are advised to fix minimum wages at not less than the National Floor Level Minimum Wage.
- Some states such as Kerala and Delhi already have a higher minimum wage for unskilled labourers than what has been announced by the government, but in the absence of legal backing, the lowest minimum wage can drop very low.