Labour Laws and Practice · Law of Wages

Minimum Wages and Fixation of Floor Wage under the Code on Wages, 2019

Updated 11 October 2026 · Fact-checked

The Code on Wages, 2019 makes the appropriate Government fix minimum rates of wages. The Central Government fixes a floor wage, and no minimum wage may fall below it. Fixation follows a committee or notification route, with revision ordinarily within five years. To answer, state the provision, apply the facts, then conclude.

Understand Minimum Wages and Fixation of Floor Wage

The Code on Wages, 2019 lets the appropriate Government (Central or State, depending on the establishment) fix a minimum rate of wages for employees. It can be fixed for time work or for piece work. Time work rates may be by the hour, the day or the month.

The Central Government sets a floor wage under section 9, taking into account the minimum living standards of a worker. Different floor wages may be fixed for different geographical areas. Think of the floor wage as the base. The minimum wage fixed under section 6 cannot be lower than it.

If a minimum wage already fixed is higher than the floor wage, the Government cannot reduce it. This protects workers in places where wages are already better.

When fixing minimum wages, the Government must primarily consider skill (unskilled, semi-skilled, skilled, highly-skilled) or geographical area, or both. It may also consider arduousness of work, such as difficult temperature or humidity, hazardous processes or underground work. It should keep the number of minimum rates as low as possible.

The Code also deals with the normal working day, rest day and overtime for employees whose minimum wage is fixed. Overtime must be paid at not less than twice the normal rate of wages.

Key rules to remember

Floor wage (section 9): Minimum wage fixed under section 6 ≥ floor wage; The Central Government fixes the floor wage, and it can differ by geographical area. An earlier higher minimum wage must not be reduced.
Overtime rate (section 14): Overtime rate ≥ 2 × normal rate of wages; Applies for every hour or part of an hour worked beyond a normal working day, where minimum wage is fixed by the hour, day or a longer prescribed period.
Fixation procedure (section 8): Committee route OR notification of proposals with at least 2 months' notice; The notification comes into force after 3 months from issue unless it says otherwise. Review or revision is ordinarily at an interval not exceeding five years.
Committee composition (section 8(2)): Employer reps = Employee reps; independent persons ≤ 1/3 of total members; Employee representatives must equal employer representatives in number.
Components of minimum wage (section 7): Basic + cost of living allowance (+ cash value of concessions), or an all-inclusive rate; Cost of living allowance is adjusted to the cost of living index number.
Piece work (sections 6(3) and 12): Where only a minimum time rate is fixed, pay ≥ that minimum time rate; A minimum time rate must be fixed for piece workers so they secure a time-work minimum.
Less than a normal day (section 10): Daily-rated employee working fewer hours is paid for a full normal day; Exceptions: failure to work is due to the employee's unwillingness, or other prescribed cases.

How to solve Minimum Wages and Fixation of Floor Wage questions

Use this method for any case or theory question on minimum wages, floor wage or overtime.

1Identify who the appropriate Government is and whether a minimum wage has been fixed for the employee.
2Identify the issue: floor wage, fixation, revision, components, time or piece rate, working day, or overtime.
3State the rule from the relevant section in plain words with its exact conditions.
4Apply the facts: check the wage unit (hour, day, month), the hours worked and the rates given.
5Do the arithmetic if needed. Normal rate first, then overtime at not less than twice that rate.
6Check the limits: floor wage as the lower bound, notice of at least two months, five-year review, three-month commencement.
7Conclude clearly and state the practical compliance point, such as what the employer should pay or what the Government must do.

Quickest way: Rule, facts, number, conclusion

When to use it: Use it for short case questions with a calculation or a yes/no compliance issue.

Write the section and the rule in one or two lines.
Match each fact to a condition in the rule.
For overtime, compute the normal hourly rate, double it, then multiply by the extra hours.
For minimum versus floor wage, compare the two numbers. The minimum wage cannot be lower.
Write a one-line conclusion.

Common mistakes in Minimum Wages and Fixation of Floor Wage

Saying the State Government fixes the floor wage.
Students know States fix minimum wages and assume the same for the floor wage.
Fix: Remember that section 9 gives the floor wage power to the Central Government. The appropriate Government fixes minimum wages under section 6.
Writing that a minimum wage can be reduced to match a lower floor wage change.
Students read the floor wage as a fixed target.
Fix: Section 9(2) bars reducing an earlier minimum wage that is higher than the floor wage.
Mixing up time limits: two months, three months and five years.
All three appear in section 8.
Fix: Two months is the minimum notice period for proposals. Three months is when the notification comes into force unless it says otherwise. Five years is the ordinary review interval.
Paying overtime at the normal rate or at 1.5 times.
Students recall older practice or general ideas of overtime.
Fix: Under section 14 the overtime rate must not be less than twice the normal rate of wages.
Treating the independent members of a committee as equal in number to the other sides.
Students recall a three-way split.
Fix: Employee representatives equal employer representatives. Independent persons cannot exceed one-third of the total members.
Denying a full day's wages to a daily-rated worker who worked fewer hours, even when the employer gave no work.
Students assume pay follows hours worked.
Fix: Section 10 entitles the worker to a full day's wages unless the failure to work is due to unwillingness or a prescribed case.

Worked examples

Example 1

A State Government notified a minimum wage of ₹400 per day for unskilled workers in an area. The Central Government later fixes a floor wage of ₹375 per day for that area. Another area has a State minimum wage of ₹350 and a floor wage of ₹375. What is the legal position in each area?

Show the solution

Rule: under section 9(2), the minimum rate fixed under section 6 must not be less than the floor wage, and a higher earlier minimum must not be reduced.
First area: ₹400 is more than ₹375. The State cannot reduce it to ₹375. It stays at ₹400.
Second area: ₹350 is less than ₹375. The minimum wage must be fixed at not less than the floor wage.
Conclusion: the State must bring the second area to at least ₹375.

Answer: In the first area the minimum wage stays at ₹400 and cannot be reduced. In the second area it must be raised to at least ₹375.

Example 2

Ravi works in a Pune factory. His minimum wage is fixed by the day at ₹800 for a normal working day of 8 hours. One day he works 11 hours. What is the least amount the employer must pay for that day under the Code on Wages, 2019?

Show the solution

Rule: under section 14, hours beyond the normal working day are paid at an overtime rate not less than twice the normal rate of wages.
Normal hourly rate = ₹800 ÷ 8 = ₹100.
Overtime rate = 2 × ₹100 = ₹200 per hour.
Overtime hours = 11 − 8 = 3 hours, so overtime pay = 3 × ₹200 = ₹600.
Total = ₹800 + ₹600 = ₹1,400.

Answer: The employer must pay at least ₹1,400 for that day: ₹800 normal wages plus ₹600 overtime.

Exam tips

Attach each rule to its section and recall the numbers exactly: two months, three months, five years, twice the normal rate.
In a case question, say who the appropriate Government is and what it must do before reaching the conclusion.
Draw a quick line of floor wage versus minimum wage when numbers are given. It makes the answer clear.
For overtime sums, show the normal hourly rate, the doubled rate and the hours. Marks go for steps.
Close with a practical compliance point, such as notification, committee composition or correct overtime payment.

Practice questions from Law of Wages

Minimum Wages and Fixation of Floor Wage in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Minimum Wages and Fixation of Floor Wage: frequently asked questions

What is the floor wage under the Code on Wages, 2019?

It is a base wage fixed by the Central Government under section 9, taking into account the minimum living standards of a worker. It can differ by geographical area. Minimum wages fixed by the appropriate Government cannot be lower than it.

How is minimum wage fixed under the Code on Wages?

Under section 8 the appropriate Government either appoints committees to enquire and recommend, or publishes proposals by notification with at least two months for objections. After considering the recommendations or representations, it fixes the rates by notification. The notification generally takes effect after three months.

How often must minimum wages be revised?

The appropriate Government must review or revise minimum wages ordinarily at an interval not exceeding five years. The word ordinarily matters in answers.

What is the overtime rate under the Code on Wages?

Section 14 requires the employer to pay for every hour or part of an hour worked beyond a normal working day at not less than twice the normal rate of wages. It applies to employees whose minimum wage is fixed by the hour, the day or a prescribed longer period.