TYPES OF WAGES: Minimum wages, Fair wages, Just wages, Efficiency wages

PRESENTED BY :

RESHU BANSAL

BHARTI SHARMA

ANJALI MISHRA

SUPRIYA TIWARI

AKANSHA SINGH

AKANSHA KHANDELWAL

INTRODUCTION: The term compensation as a substitute word for wages

and salaries, is of recent origin. Wages is now considered as a cost factor. Therefore, strategic management of wages and salaries is very important for organizations. Employee compensation is a better term than employee benefits or wages or salaries. What the employee provides the employer is a labor service, usually known as work.

COMPENSATION MANAGEMENT:Pay or compensation represents an exchange between the

employee and the organization. Each gives something in return for something else.

Compensation should be fair, irrespective of economic consideration. Many scholars believe that compensation is the outcome of productivity.

DEFINATION OF WAGES: Under Sec. 2(m) wages includes ‘Wages for leave period,

holiday pay, overtime pay, bonus, attendance bonus etc. Any award of settlement and production bonus if paid, constitutes wages. But under Payment of Wages Act, 1948 ‘Retrenchment compensation , payment in lieu of notice and gratuity payable on discharge constitute wages.

THE PAYMENT OF WAGES ACT 1936It extends to the whole of India .The Central Government is responsible for enforcement

of the Act in railways, mines, oilfields and air transport services, while the State Governments are responsible for it all other establishments ( factories and other establishments)—amendment 2005.

Wage Period:

(1) Every person responsible for the payment of wages under section 3 shall fix periods (in this Act referred to a wage period) in respect of which such wages shall be payable.

 (2) No wage-period shall exceed one month.

Time for payment of wages 

 (a) any railway, factory or [industrial or other establishment] upon or in which less than one thousand persons are employed, shall be paid before the expiry of the seventh day.

(b) any other railway, factory or [industrial or other establishment] shall be paid before the expiry of the tenth day, after the last day of the wage-period in respect of which the wages are payable

MINIMUM WAGES ACT, 1948:A Minimum Wages Bill was introduced in the Central

Legislative

Assembly on 11.4.46 to provide for fixation of minimum wages in certain employments. It was passed in 1946 and came into force with effect from 15.3.48.

MINIMUM WAGES:The minimum amount of compensation an employee must

receive for performing labour . Minimum wages are typically established by contract or legislation by the government. As such, it is illegal to pay an employee less than the minimum wage.

Minimum wage in a country is fixed by the government in consultation with business organizations and trade unions.

National Floor Level Minimum Wage was fixed at Rs.35/- per day in 1996.

National Floor Level Minimum wage to Rs.40/- per day in 1998. Further to Rs.45/- w.e.f. 01.12.1999 and Rs. 50/- per day w.e.f. 01.09.2002.

National Floor Level Minimum Wage was revised upwards to Rs.66/- per day with effect from 1.02.2004.

Central Government further revised the National Floor Level Minimum Wages from Rs.66/- to Rs.80/- per day with effect from 01.09.2007.

The minimum wage attempts to protect employees from exploitation, allowing them to afford the basic necessities of life. The minimum wage rate fluctuates between countries, and sometimes between states .

STATES MINIMUM WAGES

Bihar 427

Chandigarh 387

Delhi 81

Madhya Pradesh 576

Rajasthan 212

Punjab 664

JUST WAGES OR LIVING WAGESLiving wages has been defined differently by different

people in different countries. The best definition is given by Justice Higgins which reads "Living wage is a wage sufficient to ensure the workman food, shelter, clothing, frugal comfort, provision for evil days etc. as regard for the skill of an artisan, if he is one".

According to Fair Wages Committee Report: "The living wage should enable the male earner to provide himself and his family not merely the basic essentials of food, clothing and shelter but a measure of frugal comfort including education for the children, protection against ill-health, requirement of essential social needs and measures of insurance against old age."

EFFICIENCY WAGESHigher than market wage paid to encourage higher output and to

raise worker morale, and to discourage absenteeism and inventory shrinkage.

The argument is that paying workers a higher wage may lead to increased productivity from the worker. If a worker gets a relatively higher wage, he may feel more loyal and devoted to the company.

With a higher wage, he may also fear being made unemployed and so will work harder to make sure he keeps his job. Therefore, although the firm pays more, they get more productivity from their workers.

FAIR WAGES

Generally Fair wages refer to : ‘Company practices that lead to sustainable wage developments’.

Fair wages refer to: ‘Wage levels and wage-fixing mechanisms that provide a living wage floor for workers, while complying with national wage regulations (such as the minimum wage, payment of wages, overtime payments, provision of paid holidays and social insurance payments), ensure proper wage adjustments and lead to balanced wage developments in the company

DIMENSION OF FAIR WAGES

1. Payment Of Wages A wage which is regularly and formally paid in full to the workers.

2. Living Wages A wage that ensures minimum acceptable living standards.

3. Minimum Wages A wage which respects the minimum wage regulations.

4. Prevailing Wages A wage which is comparable to wages in similar enterprises in the same

sector.

5. Payment Of Working Hours A wage that does not generate excessive working hours and properly

rewards normal working hours and overtime.

6. Pay systems A wage that leads to a balanced wage structure between the basic wage and additional bonuses and benefits.

7. Real wages A wage that progresses at least in proportion to price increases.

8. Wage share A wage that progresses proportionally along with enterprise sales and profit growth and which does not lead to a fall in the wage share in enterprise performance growth.

9. Wage costs A wage whose progression does not lead to a dramatic reduction in wage costs within total production costs and as a percentage of employment.

10. Work intensity, technology Wages A wage that progresses along with changes in intensity at work,

technological contents and the evolving skills and tasks of the labour force.