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      Question

      Under Section 6 of the Code on Wages, 2019, which of the

      following factors must the appropriate Government primarily take into account while fixing minimum wages?
      A Profitability of the industry, demand for labour, and inflation rate Correct Answer Incorrect Answer
      B Skill of workers required, difficulty and nature of work, and geographical area Correct Answer Incorrect Answer
      C GDP growth rate of the state, cost of raw materials, and international wage benchmarks Correct Answer Incorrect Answer
      D Consumer Price Index, employer's annual turnover, and number of workers employed Correct Answer Incorrect Answer

      Solution

      Section 6(6) of the Code on Wages, 2019 provides that while fixing minimum wages, the appropriate Government shall primarily take into account: (i) the skill of workers required categorised as unskilled, semi-skilled, skilled, and highly skilled; (ii) the arduousness of the work assigned whether the nature of work involves difficulty, hazard, or physical strain; and (iii) the geographical area in which the employment is carried out, acknowledging regional differences in cost of living. Unlike the old Minimum Wages Act, 1948 which applied only to scheduled employments covering roughly 30% of the workforce, the Code on Wages now mandates minimum wages for all employees across all sectors, both organised and unorganised. The Code also mandates that minimum wages may include a basic rate of wages and a special allowance linked to the cost of living index. Further, the Code on Wages (Central) Rules, 2025 prescribe that minimum wages must be calculated considering a standard working-class family comprising an employee, spouse, and two children equivalent to three adult consumption units. Minimum wages must be revised at intervals not exceeding five years.

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