High-Level MCQs on The Code on Wages, 2019: Minimum Wages & Payment of Wages
Labour Laws in India
1. Under Section 6, the primary criterion for the appropriate Government to fix the minimum rate of wages is to take into account:
(a) The arduousness of work and the financial capacity of the employer.
(b) The skill of workers required and the geographical area.
(c) The cost of living index and the age of the worker.
(d) The profitability of the establishment and the nature of the industry.
Answer: (b) The skill of workers required and the geographical area.
Explanation: Section 6(6)(a) mandates that the appropriate Government shall “primarily” take into account the skill of workers (unskilled, skilled, etc.) or geographical area or both. Arduousness, under clause (b), is an additional factor that “may” be taken into account.
2. As per Section 7, the “all-inclusive rate” for minimum wages consists of:
(a) Basic rate and cost of living allowance only.
(b) Basic rate, cost of living allowance, and the cash value of concessions in respect of supplies of essential commodities.
(c) Basic rate and the cash value of all non-monetary amenities.
(d) A consolidated rate that includes overtime pay.
Answer: (b) Basic rate, cost of living allowance, and the cash value of concessions in respect of supplies of essential commodities.
*Explanation: Section 7(1)(c) defines an “all-inclusive rate” as one allowing for the basic rate, the cost of living allowance, and the cash value of the concessions, if any.*
3. The procedure for fixing minimum wages for the first time, as per Section 8, requires the appropriate Government to:
(a) Directly notify the rates after consulting the Central Advisory Board.
(b) Either appoint a tripartite committee or publish its proposals for objections.
(c) Seek a directive from the High Court of the State.
(d) Obtain unanimous consent from the employer’s associations.
Answer: (b) Either appoint a tripartite committee or publish its proposals for objections.
Explanation: Section 8(1) provides two alternative methods: (a) appointing a committee with representatives from employers, employees, and independent persons, or (b) publishing a notification of its proposals and inviting representations.
4. The concept of a “floor wage” introduced in Section 9 is characterized by which of the following?
(a) It is fixed by the State Governments for their respective states.
(b) The minimum rates of wages fixed by the State Government can be lower than the floor wage if justified by local conditions.
(c) Once the Central Government fixes a floor wage, State Governments cannot fix minimum wages below it.
(d) It is revised every three years.
Answer: (c) Once the Central Government fixes a floor wage, State Governments cannot fix minimum wages below it.
Explanation: Section 9(2) explicitly states that the minimum rates of wages fixed by the appropriate Government shall not be less than the floor wage. It also prohibits the reduction of existing higher minimum rates.
5. According to Section 10, an employee who works for less than a normal working day is entitled to wages for a full day, except when:
(a) The failure to work is due to a power cut in the establishment.
(b) The employer could not provide raw materials.
(c) His failure to work is caused by his own unwillingness to work.
(d) The establishment was closed for a national holiday.
Answer: (c) His failure to work is caused by his own unwillingness to work.
Explanation: The proviso to Section 10 states that an employee shall not be entitled to wages for a full normal working day if his failure to work is caused by his unwillingness to work and not by the employer’s omission to provide work.
6. The overtime rate prescribed under Section 14 for work done in excess of the normal working day is:
(a) Not less than one and a half times the normal rate.
(b) Not less than twice the normal rate.
(c) Not less than the normal rate plus a fixed allowance.
(d) As agreed upon between the employer and the employee.
Answer: (b) Not less than twice the normal rate.
Explanation: Section 14 unambiguously states that the overtime rate shall not be less than twice the normal rate of wages.
7. Under Section 17, the time limit for payment of wages to a monthly-rated employee is:
(a) On the last working day of the month.
(b) Before the expiry of the seventh day of the succeeding month.
(c) Within thirty days from the end of the wage period.
(d) Before the 5th of the succeeding month.
Answer: (b) Before the expiry of the seventh day of the succeeding month.
Explanation: Section 17(1)(iv) clearly specifies the time limit for monthly wage payments as “before the expiry of the seventh day of the succeeding month.”
8. As per Section 18, the total amount of deductions that can be made from an employee’s wages in any wage period is capped at:
(a) Seventy-five percent of the wages.
(b) Fifty percent of the wages.
(c) Thirty-three percent of the wages.
(d) The amount equivalent to the debt owed.
Answer: (b) Fifty percent of the wages.
Explanation: Section 18(3) sets a clear upper limit, stating that the total deductions shall not exceed fifty percent of the wages for that wage period.
9. Which of the following deductions from wages is NOT authorized under Section 18 of the Code?
(a) Deductions for subscription to a provident fund.
(b) Deductions for payment to a co-operative society.
(c) Deductions for loss of goods due to the employee’s negligence.
(d) Deductions for damage to the employer’s property due to a natural calamity.
Answer: (d) Deductions for damage to the employer’s property due to a natural calamity.
*Explanation: Deductions for damage or loss under Section 18(2)(c) are permissible only where the damage/loss is “directly attributable to his [the employee’s] neglect or default.” A natural calamity does not fall under this category.*
10. The imposition of a “fine” on an employee under Section 19 is subject to which of the following conditions?
(a) It can be imposed for any act of indiscipline as deemed fit by the employer.
(b) The total amount of fine must not exceed three percent of the wages in that wage-period.
(c) It can be recovered in instalments over a period of six months.
(d) It does not require giving the employee an opportunity to show cause.
Answer: (b) The total amount of fine must not exceed three percent of the wages in that wage-period.
Explanation: Section 19(4) sets this specific limit. Other options are incorrect: fines require prior specification of acts (S.19(1)), an opportunity to show cause (S.19(3)), and cannot be recovered after 90 days (S.19(6)).
11. The provisions of Chapter III (Payment of Wages) regarding deductions:
(a) Apply automatically to all Government establishments.
(b) Do not apply to any Government establishment under any circumstance.
(c) Apply to Government establishments only if the appropriate Government notifies them to be applicable.
(d) Apply only to Central Government establishments.
Answer: (c) Apply to Government establishments only if the appropriate Government notifies them to be applicable.
Explanation: Section 25 provides a saving clause, stating that the chapter does not apply to Government establishments unless the appropriate Government issues a notification to apply them.
