The Minimum Wages Act empowers central and state governments to fix minimum wages for workers in scheduled employments, protecting low-wage workers from exploitation, particularly in unorganised sectors where bargaining power is weak.
Section 3 requires the appropriate government to fix minimum rates of wages for employments listed in the schedule, and these rates must be revised periodically, typically every 5 years, with dearness allowance components often revised more frequently to account for inflation.
Section 12 mandates that employers pay wages at rates not less than the minimum fixed, and Section 22 makes non-payment or underpayment an offence punishable with imprisonment up to 6 months or fine up to Rs 500 (as originally notified, since enhanced through state amendments and the Code on Wages framework).
Section 20 provides a claims mechanism before an Authority appointed under the Act, allowing workers to recover unpaid wages along with compensation up to 10 times the amount due, without needing to approach a civil court.