The government has come a step closer to implementing a national floor wage framework as mandated by labour codes to prevent wages from falling below a subsistence level across the country, with Director General, Labour Bureau, being empowered to do the computation job.
The DG, Labour Bureau, will function as an “authority for computation of the cost of living allowance and the cash value of the concessions in respect of supplies of essential commodities at concession rate in the establishments,” read the gazette notification issued late last evening by the Ministry of Labour and Employment. This has been done to give effect to subsection 2 of section 7 of the Code on Wages, 2019.
The valuation of essential commodities (such as food or housing) supplied at concessional rates to establishments will be included in the wage calculation. The DG, Labour Bureau, who works under the Labour and Employment Ministry, will now have an added responsibility apart from his existing assignments to act as the supreme administrative and technical authority for collecting, compiling, and analysing labour statistics in the country.
The Centre has the power to set varied floor wages for different geographical areas, accommodating regional disparities in the cost of living, Puneet Gupta, Partner, Ernst & Young India, told businessline.
Once the national floor wage or wages are fixed by the Centre, States cannot have minimum wages lower than that, Gupta stated. The government, however, is still to come out with a mechanism for determining the minimum wages for sectors such as telecom, banking, mines, transport and insurance where the Centre is the ‘appropriate government’.
States offer different minimum wages, with Rajasthan having among the lowest while southern States pay comparatively better minimum wages, as per the EY India partner.
With growing inflation due to West Asia crisis, workers are finding difficult to make a living. Haryana and Uttar Pradesh (UP) have recently revised their respective minimum wages effective from April 1. While UP revised retrospectively minimum wages, which went up to a minimum of 9.21 per cent to a maximum of 21 per cent, across three different categories — Noida-Gaziabad, for districts with municipal corporations and remaining districts. Haryana has increased it by 35 per cent.
Very few countries have floor concept of national wages. The U S has a federal floor system with State free to set higher rates but not less than that.
The Ministry has also issued thirteen other gazette notifications, including for authorising government to notify officers for ascertaining whether specific work is of same or similar nature, ensuring equal remuneration and fair wage standards. Another set of designated officers would deal with disputes over claims of non-payment or less that minimum wages, according to a different notification under Code on Wages, 2019.
Earlier on May 9, the government fully operationalised the four labour codes by publishing rules through 17 gazette notifications, ensuring minimum wage and universal social security for all workers.
Published on May 15, 2026