Understanding Minimum Wage, Minimum Wages Act, and HR Guidelines


HR Glossary

The minimum wage is the minimum remuneration that employers are required to pay their employees. It is basically to protect workers against unfair pay, such that they can maintain a certain standard of living.

Government regulations, such as the Minimum Wages Act, set the base statutory wage and establish this legal minimum pay as a wage floor. This is to ensure fair wage rates and equitable pay for all employees. Further, the International Labor Organization reports that about 90% of all nations use the minimum wage as a policy instrument.

Frequently Asked Questions

Q1.

What is the Minimum Wage Meaning?

Ans.It is the lowest monetary benefit below which employers cannot legally pay their employees. In other words, it is the basic level of income for the employees to ensure fairness and equity.

Q2.

What is the Minimum Wages Act, 1948?

Ans. The act is an Indian legislation that provides for the statutory fixation of the minimum wages for a certain kind of labor to prevent them from exploitation. It states that both the central and state governments are responsible for fixing, reviewing, and revising wages for workers under their jurisdiction.

Q3.

Who decides the minimum wage?

Ans. In India, both the central and state governments decide the rate. 
In the USA, each state is allowed to set its own laws independently of the federal government. The government minimum wage rates vary across regions. These standards act as a mandated wage or legal minimum salary, promoting equitable pay practices. If the employee is subject to both the state and federal laws, then he would be entitled to the higher one.

Q4.

How often is the minimum wage updated?

Ans. Section 3 of the Minimum Wages Act, 1948, a labor law of India, empowers the appropriate government to fix the minimum rates of wages in scheduled employments. It is said to revise the minimum rates at a proper interval not exceeding five years. 

The United States does not have a federal minimum wage that is automatically updated periodically.

Q5.

What happens if an employer pays less than the minimum wage?

Ans. If an employer is doing it, then they are violating the law and can face fines for each underpaid employee.

Q6.

Can tips or bonuses count toward minimum wage?

Ans. Generally, tips and bonuses are not included in the statutory minimum wage; rather, they are regarded as different types of payment or performance bonuses.

Q7.

How does minimum wage affect HR and payroll practices?

Ans. HR procedures are greatly impacted by the minimum rates for employees, especially when it comes to hiring and remuneration. For HR professionals, minimum wage compliance is essential. 

By developing sound minimum wage HR policies, organizations can ensure their pay structures meet the guidelines, maintain the legal minimum salary, and avoid penalties. 

They must also stay informed about changes to these wage rates to prevent future labor issues and legal repercussions.

Q8.

What is the minimum wage in India, and how is it set?

Ans. In India, it is subject to periodic revisions by the state governments and differs between states and Union Territories. The type of work and skill level are two factors that go into determining the rates.

Q9.

What is the federal minimum wage in the USA, and how does it apply?

Ans. It is $7.25 per hour in the USA. This rate applies to covered nonexempt workers. Also, the lowest remuneration for employees who receive tips is $2.13 per hour.

Q10.

How can HR ensure compliance with minimum wage regulations?

Ans. HR can ensure compliance by keeping up with regulatory changes and periodically assessing and revising pay plans. Furthermore, putting in place payroll systems that support minimum wage HR policies and can adapt to changes in government minimum wage rates. 

HR must also instruct and train management and staff on these compliance procedures.

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