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CS Professional · Labour Laws and Practice · Law of Wages

The Central Government notifies a floor wage for a geographical area. A State Government had earlier fixed a minimum rate of wages for that area which is higher than the new floor wage. Under the Code on Wages, 2019, what is the position?

The State must not reduce its earlier minimum rate of wages. The floor wage only sets a lower limit, and where an existing State rate exceeds it, the Code expressly bars the appropriate Government from reducing that higher rate.

  1. AThe State must lower its rate to the floor wage to ensure uniformity
  2. BThe State must not reduce its earlier higher minimum rate of wagesCorrect
  3. CThe State rate is void until the Central Government approves it
  4. DThe floor wage automatically replaces the State rate

Explanation

Section 9(2) says minimum rates fixed by the appropriate Government cannot be less than the floor wage. If the earlier rate is more than the floor wage, the appropriate Government shall not reduce it. Option A reverses this rule.

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