Maslo Consulting is India's only HR firm with its own proprietary AI product suite. This guide is written by our HR practitioners with 20+ years of field experience across Indian companies. For specific advice on your situation, contact our team.
How minimum wages are set
Minimum wages in India are notified separately by each state government (and, for certain sectors, by the central government), and are typically revised twice a year to account for inflation through the Variable Dearness Allowance. Rates are set by employment category, skill level (unskilled, semi-skilled, skilled, highly skilled), and sometimes by zone within a state — which means a company operating across multiple states cannot apply a single minimum-wage figure company-wide.
State variation and the Code on Wages
The Code on Wages 2019 introduces the concept of a national floor wage, below which no state can set its minimum wage, intended to reduce the current wide variation between states. Until the code's rules are fully operationalised, however, employers still need to track each applicable state's current notified rates directly — the safest practice is a standing compliance calendar that flags each state's semi-annual revision dates, since paying below the applicable minimum wage is a strict-liability violation regardless of intent.
Frequently asked questions
How are minimum wages determined in India?
Minimum wages in India are set separately by the central government and each state government. The central government sets minimum wages for scheduled industries under its jurisdiction. State governments set minimum wages for other establishments within their states. Minimum wages are revised periodically and vary by skill category, industry, and zone within each state.
What is the national floor level minimum wage?
The Code on Wages 2019 introduces a national floor wage which serves as the minimum below which no state can set its minimum wage. The national floor wage is reviewed periodically. States must ensure their minimum wages are at or above this floor level for all categories of workers.
What are the consequences of paying below minimum wage?
Paying below minimum wage is a criminal offence under the Minimum Wages Act and the new Code on Wages. Penalties include fines up to Rs 50,000 for first offences and up to Rs 1,00,000 for repeat offences, plus imprisonment of up to five years in serious cases. Employers are also liable to pay the difference between actual wages paid and minimum wages.
Does minimum wage apply to IT companies?
Yes. Minimum wage laws apply to IT companies in India. Many states have specific minimum wage notifications for software professionals and IT sector employees. Compliance with minimum wages is verified during labour inspections and is increasingly scrutinised as part of vendor audits by global clients.
How often are minimum wages revised in India?
Minimum wages are typically revised every six months or annually depending on the state. Revisions are based on the Consumer Price Index for the relevant category. Employers must track minimum wage notifications for each state they operate in and update payroll systems accordingly to maintain compliance.
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