WAGE PAYMENT

WAGE

“The sum of money paid under contract by an employer to a worker for his services”

Wages, salary, pays fees are the synonymous terms having the same

meaning. In case of those employed for manual work, they are said to paid wages.

TYPES OF WAGES

Wages may be classified in the following categories :

1.Nominal Wages2.Real Wages3.Living Wages4.Minimum Wages5.Fair Wages

NOMINAL WAGES

It is an amount of money paid to the worker in cash for the efforts put in by him in an industry is called nominal wages or money wages. In this case no other advantages is included.

cont…

REAL WAGES

This is the money value of all the facilities given by the employer including the cash payment for the efforts and work, rendered by the worker to the factory.

cont…

LIVING WAGES

The wages are fixed by collective bargaining of the employee and employer. It meets some of the requirements of a social family like education, housing, food, clothes, medical care and some insurance against the misfortune along the prime necessities of life are called living wages.

cont…

MINIMUM WAGES

The wage is paid in the absence of strong bargaining power of the labour. Wages cannot be raised beyond the capacity of industry to pay. As we know that labour is a human being and from humanitarian point of view he is protected. So, there is problem of fixing a minimum wage for the workers.

cont…

FAIR WAGES

The rates for the fair wage range between the minimum wage and living wages . It depends upon the capacity of the worker to do work. This wage is also fixed by the collective bargaining power of the employer and employee.

CLASSIFICATION OF WAGE PAYMENT

1. Time Rate System

2. Piece Rate System

3. Combination of Time and Piece rate system

Time Rate System

Under this system, a definite sum of money is paid for a particular period of work. It may be hourly, weekly or monthly unit of time.

cont…

Piece Rate System

Under this system the worker is paid according to the quantity of work he completes satisfactorily. The rate per unit of work is fixed. This system therefore provides an adequate incentive for the more efficient workers. It does not guarantee a fixed minimum wage to worker.

cont…

Combination of Time Rate and Piece Rate System

Under this system both time and product are taken into consideration. Minimum weekly wages are fixed for every worker which are to be paid irrespective of his output during the week, but his presence for the full week is necessary.