Minimum Wage Rate in Pakistan A Case for Unskilled labors

Outline:  Overview  What is minimum wage rate?  Unskilled labor  Minimum Wage legislation in Pakistan  Objectives of the law  Pakistan wage rate For Unskilled Labor  benefits

Overview  Minimum wage rate is the minimum rate of recompense or wage that employers are required to pay to their workers under the judicial jurisdiction of the state law. In simple words it is the lowest bar of salary under which employees cannot work legally.  For a developing country like Pakistan which is a labor driven economy, unskilled labors are highly struggling to attain a better living standard. Since the need for specialization of labor is increasing in the competitive market, the unskilled labor is barely making the minimum wage level.

What is minimum wage rate? Minimum wage rate law embodies conditions which prohibits an employer to hire a worker under the particular wage rate. More than ninety countries of the world follows the minimum wage rate concept depending upon the demographics of the particular state. In the initial phase of development, these laws were mostly very unique and particular in nature as they were targeted at a specific set of society for example in the earlier phase of minimum wage laws were applied only to women and children or selected industries but as with development of economic affairs, the horizon of law was widened to cover the general labor allocation. in the beginning of the campaign, minimum wage laws were not met to great success however, they laid the foundation of labor councils and boards.

Unskilled Labor In an intense labor market of Pakistan, both skilled and unskilled labor shares a massive contribution in the economy. But as the journey of information and technology has gained some pace, the demand for skilled and specialized labor has increased massively leaving behind the unskilled labor. Technology has affected the earning of unskilled labor. Here comes the role of government of Pakistan to protect the unskilled labor and ensure a minimum wage level to protect their livelihood.

Minimum Wage legislation in Pakistan The Minimum Wage Ordinance of 1961 was the first ever effort on the road to provide wage protection to the labors. This ordinance assist in forming the Provincial Minimum Wage Boards. These wage boards constitute the representatives of both, employers and workers. These forums were embodies with rules to facilitate the wage determination for skilled and unskilled labors. The roots of the ordinance were further expended with a broader range of implications in 1969.

Objectives of the law The 1969 Pakistan Minimum Wage Ordinance for unskilled workers was focused to fulfill the objectives already prescribed in 1969 Labor policy as “a fair and equitable living to the workers”. In the preamble of the ordinance, it is well defined that it is aimed to protect the unskilled labor from the exploitation of the employers.

The Minimum Wages for Unskilled Workers Ordinance, 1969 was later amended as Minimum Wages for Unskilled Workers (Amendment) Act, 1993 which fixed the minimum wage as Rs.1,500 p.m. It was later reviewed again in 2001, raising the wage to minimum Rs. 2, 500.

Pakistan wage rate For Unskilled Labor Before the devolution 2010, entire country followed a similar wage rate system. However since the devolution of powers to provinces this has become a provincial subject now and each province follows its own policy on the matter. In the budget plan of 2014, finance minister raise the minimum wage rate from 10,000 to 12,000. however, there were some complications observed in the provincial budgets, government of KPK and Punjab seems welcoming for the decision. However, the governments of Baluchistan and Sindh shows some reservations on the decision and Sindh only made a 10 percent raise in the salary. On the other side, government of Baluchistan, remained stick to their previously held rate of Rs.9000.

In accordance with the section 21 and 22 of the minimum wage rules, 1962, state can ensure the proper regulation of the wage rate law through labor inspectors.These inspectors make several visits to the industries to check the compliance of the law. Similarly, minimum wage ordinance 1961, allows the provincial government under section 9-A to hire personnel to keep a check on the compliance. If caught any irregularity in the application of the law by employers, they will have to face six month imprisonment or fine or even both under the section 9-3 of the ordinance.

In accordance with the section 4 of the minimum wage ordinance 1961, wages will be determined buy the Minimum Wage Boards of all provinces each. This board will give its recommendations on wage determination for unskilled labor. Section 5 of the ordinance allows the board to of the provinces o determine the wage rate in the industries where there was no such regulation before.

Benefits Of The Minimum Wage Rate Law It protects the paying rights of young labors, and the illiterate labors who are not even aware of their rights. Reduce labor exploitation It helps to reduce unemployment and tax burden on a state It ease the business planning process It provides an employment spur to the unemployed lot

Kiran is a passionate writer looking for innovative and unique ways to connect with the readers. This presentation is the property of the Rightjobs.Pk, leading job portal in Pakistan determined to work for both working and business community and to form a bridge between employers and job seekers in a highly competitive market. To See this topic inforgraphics visit this link : unskilled-labours-of-pakistan/