The Labour Ministry has proposed a minimum monthly income of Rs.10,000 for contract workers, evoking strong reactions from the industry. The move will drastically increase the minimum wages of contract labourers from around Rs.6,000 per month that is paid to them in a few sectors at present.
According to the plan the employers will need to pay Rs 10,000 as minimum monthly income to contract workers for all kinds of work. At present, employers give the fixed minimum wages to workers for 45 economic activities, as mentioned in the Minimum Wages Act, 1948.
As per the Contract Labour (Regulation & Abolition) Central Rules, 1971, the wages of the contract labour shall be according to the minimum wage prescribed under Minimum Wages Act, 1948 and it should be at par with the regular workers in cases where the contract worker perform the same kind of work as the former.
1) Of the 3.6 crore contract workers about 32 % are employed by contractors in the public sector.
2) Only 60 lakh contract workers are covered under the Contract Labour (Regulation and Abolition) Act, 1970.
3) Small and medium companies operate on thin margins and they may not be able to hire people at that income level. Large companies will welcome this as the jobs will move jobs away from small factories.