Labour Codes#2 : Floor Wage

The Minimum Wages Act of 1948 grants state governments the authority to set minimum wage rates, resulting in significant wage variations across regions. Thus, to regulate the minimum wage threshold centrally, the concept of the Floor Wage is introduced under the Code on Wages, 2019.

1. The Central Government has the authority to establish a national floor wage after consulting with State Governments and obtain the advice of the Central Advisory Board constituted under sub-section (1) of section 42 of Code on Wages.
2. State governments are required to set their minimum wages above the floor wage, considering regional cost of living and economic conditions.
3. This provision ensures that wages will not fall below a specified level, even in states with lower living costs

Impact:

• Improves the conditions of labour, related to industrial or non-industrial concern.
• Balances the cost of living in all geographical areas.
• The Central Advisory Board consists of members representing employers, employees, independent experts, and State Government representatives, ensures a balanced perspective before the fixation of floor wage.