Karnataka’s Minimum Wage Sees a Significant Increase, Benefitting Two Crore Workers
In a move that is set to impact a vast number of workers in scheduled employment across Karnataka, the state government recently announced a significant increase in minimum wages. The latest notification proposes a monthly wage ranging from ₹19,319.36 for unskilled laborers in zone 3 to a maximum of ₹34,225.42 for highly skilled employees in thermal stations. This adjustment, outlined in a draft notification by the Labour Department, represents a substantial 70% hike from the existing wages, which includes variable dearness allowances, at a time when rising prices have put financial strain on countless families.
The Scope of the Notification
The notification is expected to benefit an estimated two crore workers engaged in 100 scheduled employments, including 18 additions in recent years, aligning with the Supreme Court’s directive following the Rapticos Brett case. Under the Minimum Wages Act, wage revisions are mandated at least once every five years. The most recent revision, undertaken by the BJP government in 2022, resulted in a 5% to 10% wage increase across 34 scheduled employments. With the issuance of the new draft notification, the 2022 notification has been withdrawn, making way for a fresh proposal.
Moving Forward with the Revision Process
Following the publication of the draft notification, objections are being invited before the document is presented to the Minimum Wages Advisory Board. This board, a tripartite body comprising employers, employee representatives, and government officials, will review the proposed changes before a final notification is issued. The entire process is estimated to take around three months before the revised wages are officially implemented.
Reverting to Three Zones
One notable aspect of the new notification is the reversion to a three-zone classification system for wage calculations, as opposed to the previous four-zone model. This adjustment aims to address discrepancies that arose with the addition of the fourth zone during the last revision. The zones now encompass the BBMP area (zone 1), district headquarters and city corporations (zone 2), and all other areas in the state (zone 3). Notably, this marks the first time that a single notification covers minimum wage revisions across all scheduled employments, a development welcomed by trade unions.
Reactions from Stakeholders
The announcement of the increased minimum wage has garnered mixed reactions from different quarters. While AITUC Karnataka unit secretary M. Satyanand commended the move as a long-overdue step towards scientifically determining minimum wages, B.C. Prabhakar, president of the Karnataka Employers’ Association, expressed intent to challenge the notification legally. Prabhakar cited concerns over the potential impact of sharply elevated minimum wages on the state’s industrial landscape, suggesting that such a significant increase could lead to higher production costs and spur industry migration to neighboring states with lower wage standards.
Expanded Coverage and Inclusion
In a notable expansion of coverage, the minimum wage now extends to workers in religious institutions, including temples, Mutts, mosques, churches, gurudwaras, and other religious establishments. Additionally, employees in private schools, colleges, training institutions, e-commerce companies, and courier services are among the newly introduced scheduled employments. These additions reflect a broader effort to ensure fair compensation across a diverse range of sectors.
As the process unfolds, it is evident that the revised minimum wages in Karnataka will have far-reaching implications for workers, employers, and the overall economic landscape of the state. This development underscores the ongoing dialogue surrounding fair labor practices and the balancing act between meeting worker needs and maintaining economic competitiveness. The next few months are likely to witness further discussions, debates, and negotiations as stakeholders navigate the complexities of implementing these revised wage structures across various industries and sectors.
