This Act provides for fixing minimum rates of wages. Wages shall mean all remuneration payable to an employed person on the fulfillment of the Contract employment and includes HRA.

It Includes:

• A basic rate of wages and special allowance called the Cost-of-living allowance
• A basic rate with or without Cost-of-LivingAllowance plus any concession on the supply of essential commodities.

It excludes

• The value of Rent-FreeAccommodation, Supply of Light, Water, and medical expenses
• Contributions paid by the employer towards the PF or any scheme of social insurance
• Travelling Allowance / Travelling Concession
• Gratuity, the appropriate government may fix a minimum rate of wages for time work (“a minimum time rate”). A minimum rate of wages for piece work (“a minimum piece rate”). A minimum rate of wages on a time work basis (“a guaranteed time rate”) A minimum rate of overtime work done (“an overtime rate”)

The state government is empowered to fix the minimum wages for a different level of persons depending on education and skill.

Fixation of Minimum Rates of Wages

 The appropriate government(mostly State Government) declares the minimum rates of wages.