Higher fine, prison term for minimum wage denial

Minimum Wages (Delhi) Amendment Act, 2017, notified

Employers who fail to pay the minimum wage to their workers will now face a fine of up to ₹50,000 as well as a three-year prison term, with the Delhi government’s long-pending proposal for enhanced punishments being notified recently.

The Minimum Wages (Delhi) Amendment Act, 2017, which was passed by the Delhi Assembly on August 10, 2017, was notified on May 4 after President Ram Nath Kovind gave his assent to the Bill on April 26, according to the gazette notification.

Delayed approval

The Aam Aadmi Party (AAP) government had first passed a Bill to increase penalties for denial of minimum wages on December 3, 2015. However, the legislation went back and forth between the Centre and the State. Finally, after some changes, including the definition of the term Delhi government, the Bill was again introduced and passed in 2017.

With the amendment notified, the punishment under the Minimum Wages Act, 1948 for failure to pay minimum wages was increased from a fine of ₹500 to ₹50,000 and/or a prison term of six months to three years. The punishment for other offences under the Act were enhanced from a fine of ₹500 to ₹20,000 and/or one-year imprisonment.

The amendment also specified that the rate of payment for overtime work would be “not less than two times of 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”.

With several Bills of the Delhi Assembly pending final approval from the Centre, the notification of the minimum wages amendment was welcomed by the AAP government.

AAP hails notification

“Finally, Central Govt gives its approval after several months. This will act as a strong deterrent against those employers who do not pay full min wages. Del govt will take strong action against such people [sic],” Chief Minister Arvind Kejriwal tweeted.

Meanwhile, the Delhi government’s decision to hike the minimum wage rates is still pending full implementation. The government had in 2017 increased minimum wages for unskilled, semi-skilled, skilled and graduate and above category workers to ₹13,584, ₹14,958, ₹16,468 and ₹17,916 respectively from ₹9,724, ₹10,764, ₹11,830 and ₹12,870 respectively. Though the government had notified the hiked rates, industry bodies had moved the High Court against it. Currently, there is a High Court stay against any coercive action.