Minimum wages in India: state-wise rates and how they work

Minimum wages by state

Monthly rates for basic and DA together, for the main zone and the general schedule (usually shops and commercial establishments). Other zones and industries can have different rates. Open a state for its zone, schedule, Professional Tax and LWF.

How minimum wages are set

• Skill level: unskilled, semi-skilled, skilled and highly skilled, each with its own rate.
• Zone: cities usually have a higher rate than towns and villages.
• Type of work: states publish rates for kinds of work such as shops, factories, construction and security. Under the Code on Wages, minimum wages apply to every employee, not only to listed industries.
• VDA: the variable dearness allowance follows the cost of living, and most states revise it twice a year, for example in April and October or in January and July.
• Floor wage: the Code on Wages lets the central government set a national floor wage, and no state minimum can be below it.

What counts as wages for the check

Compare the minimum wage with wages, not with gross pay: basic, DA and retaining allowance. Under the Labour Codes, allowances above half of total pay also count as wages. HRA, conveyance, overtime, bonus and the employer's PF do not count on their own. The 50% wages rule explained.

An example

Take a skilled minimum of ₹14,000 a month. An employee is paid basic ₹10,000, DA ₹2,000 and HRA ₹4,000: ₹16,000 in all. Their wages are ₹12,000; HRA is less than half of total pay, so nothing is added. They are ₹2,000 a month below the minimum, even though their total pay is above it.

Overtime and deductions

Overtime is paid at twice the ordinary rate of wages. Under the Code on Wages, total deductions in a month, such as fines, advances and recoveries, cannot be more than half of the month's wages.

Common mistakes

• Comparing the minimum wage with gross pay instead of wages.
• Using last year's rate after the VDA has been revised.
• Using the wrong zone or skill level for the job.
• Not paying arrears when a revision applies from an earlier date.
• Forgetting contract workers: the principal employer must make sure they get at least the minimum wage.

How HR Bingo handles it

Give each salary its skill category. HR Bingo compares the salary's wages with the minimum for the state and category, applying the Labour Code wages rule, and warns HR when it is short. The Huminivex payroll team updates the rates when states revise them. For contract workers, the contract labour add-on flags pay below the minimum wage.

Sources

• Ministry of Labour and Employment: Code on Wages, 2019
• Chief Labour Commissioner (Central): minimum wages

This guide explains the rules in plain words; it is not legal advice. Figures change: HR Bingo keeps statutory rates with their effective dates, and we update this page when they change.

Frequently asked questions