India: Delhi Amended the Minimum Wages Act, Making Penalties More Stringent

​The Minimum Wages Act, 1948, (hereinafter referred to as "the Act") was amended with respect to its application to the National Capital Territory of Delhi through the Minimum Wages (Delhi) Amendment Act, 2017 (hereinafter referred to as "the Amendment"), and received the president's assent recently. Among other things, the amendments that would have a significant impact are those related to cashless payment of wages, more stringent punishments for offenses, and digitization of records. A few of the important amendments are discussed below.

Minimum-Rate Considerations

While fixing or revising the minimum rates of wages, the Amendment requires the appropriate government to take into consideration:

• The skill required.
  
• The arduousness of the work assigned to the worker.
  
• The cost of living of the worker.
  
• Other such components.
  

Cashless Payment

The Amendment requires that the wages be paid through online transactions instead of cash payment in view of the national regime of going cashless. However, keeping into consideration that the daily wage labor class of people to whom these laws are applicable are dominantly dependent on cash transactions, the Amendment also prescribes two exceptions to the rule of online payment of wages:

• In case of payment of wages to the workers employed on daily wages basis, not less than minimum wages as notified from time to time by appropriate government.
  
• In case of special circumstances that are beyond the control of employer like fire in the establishment, natural calamities, death of the employer or director of the establishment, and other such circumstances as prescribed by appropriate government.
  

Overtime

Earlier, the overtime rate was to be fixed by the appropriate government. However, the Amendment fixes a minimum limit for the overtime rate that shall now not be less than two times the normal rate of wages fixed under this Act or under any law of the appropriate government for the time being in force, whichever is higher.

Penalties

Payment of wages less than the minimum wages to the laborer falling within the ambit of scheduled employment is an offense as per Section 22 of the Act. The Amendment has sought enhancement of punishment for this offense. The term of punishment has now been increased from six months to three years. The amount of maximum fine that may be imposed has also been increased from INR (Indian rupee) 500 ($7.30) to INR 50,000 ($729.73).

Section 22A of the Act prescribes general punishment for the contravention of the Act where no other penalty has been prescribed. In such cases, the penalty in the Act is only a fine that may extend up to INR 500. However, after the Amendment, the penalty will include imprisonment for a term of one year and/or a fine that shall extend up to INR 20,000 ($291.89).

Disposal of Cases

By amending Section 22B of the Act, the courts will now be required to dispose of the complaints made under Section 22 within three months of the date of making of the complaint.

Digitization for Recording Information

Employers are now required to upload employee data on a website or web portal in the manner as may be prescribed.

SS Rana & Co. is a law firm in New Delhi. © 2018 SS Rana & Co. All rights reserved. Reposted with permission of Lexology.