This presentation delves into the crucial mechanisms of Wage Boards and Pay Commissions, exploring their roles in determining fair and equitable compensation for diverse workforces.

1. WAGE BOARD AND PAY
COMMISSIONS
Manjeet Prasad | Chirag Thakkar | Switam Raj | Dhiraj Choubey | Priyanshu Kumar

2. Introduction
Wage boards and pay commissions are two important mechanisms
for setting wages in India.
They play a crucial role in ensuring fair and equitable compensation
for workers across different sectors.
This presentation will compare and contrast the two systems,
highlighting their key features, functions, and impact.

3. Wage Boards
Wage boards are tripartite bodies comprising representatives of
employers, employees, and independent experts.
They are set up by the government for specific industries or sectors to
determine appropriate wage scales and working conditions.
The recommendations of wage boards are not binding on the
government, but they carry significant weight and are often accepted and
implemented.

4. The Evolution of Wage Boards in India
Early
Beginnings:
•1929: The concept of Wage Boards first emerged in India with the Royal Commission on Labour.
•1943: The Fair Wages Committee recommended setting up Wage Boards for specific industries.
•1947: The First Industrial Policy Resolution advocated for fair wages and the establishment of Wage Boards.
Growth and
Expansion:
•1950s-1960s: Several Wage Boards were established for vital industries like coal mining, textiles, and journalists.
•1970s-1980s: More Wage Boards were created for additional sectors like plantations, docks, and sugar.
•1987: The Second National Labour Commission reviewed the Wage Board system and recommended its extension.
Recent
Developments:
•1990s-2000s: Globalization and economic reforms led to a decline in the use of Wage Boards.
•2019: The Code on Wages subsumed existing labour laws, including provisions for Wage
Boards.
•Present: Currently, only two statutory Wage Boards remain operational – for Working
Journalists and Non-Journalist Newspaper Employees.

5. Functions of Wage Boards
Conduct wage surveys and collect data on wages, allowances, and working conditions in the
industry.
Analyze the financial condition of the industry and its capacity to pay higher wages.
Consider the cost of living, skill levels, and other relevant factors.
Recommend fair and reasonable wage scales for different categories of employees.
Make recommendations on other aspects of employment, such as leave travel allowance,
gratuity, and provident fund contributions.

6. Pay Commissions
Pay commissions are appointed by the government to review the pay
scales of government employees, including civil servants, teachers,
and defense personnel.
They are typically set up at regular intervals, such as every 10 years, to
ensure that government salaries remain competitive and reflect
changes in the cost of living and economic conditions.
The recommendations of pay commissions are binding on the
government and are implemented through executive orders.

7. Functions of Pay Commissions
1
Review the
existing pay
scales of
government
employees and
compare them to
those in the
private sector.
2
Analyze the cost of
living and inflation
rates.
3
Consider the
overall economic
condition of the
country and the
government's fiscal
constraints.
4
Recommend
revised pay scales
and allowances for
different
categories of
government
employees.
5
Make
recommendations
on other aspects of
service conditions,
such as pension
benefits, housing
allowances, and
medical benefits.

8. India's Pay Commissions: A Legacy of SEVEN
1946–1947
1st Pay Commission
(1946-1947): Settled
initial pay scales for
government employees
after independence.
1955–1957
2nd Pay Commission
(1955-
1957): Recommended
adjustments to address
rising cost of living.
1970–1973
3rd Pay Commission
(1970-
1973): Introduced
revised pay scales and
introduced allowances
like House Rent
Allowance.
1976–1977
4th Pay Commission
(1976-1977): Focused
on rationalizing pay
structures and
addressing regional
disparities.
1994–1997
5th Pay Commission
(1994-
1997): Implemented
significant pay hikes
and introduced new
allowances like Leave
Travel Concession.
2006–2008
6th Pay Commission
(2006-
2008): Considered
rapid technological
advancements and
implemented major
revisions, marking a
shift into the 21st
century.
2014–2016
7th Pay Commission
(2014-
2016): Recommended
further increase in salaries
and allowances, impacting
over 5 million central
government employees.

9. Comparison of Wage Boards and Pay Commissions
Feature Wage Boards Pay Commissions
Scope Specific industries or sectors Government employees
Composition Tripartite (employers, employees,
and government)
Independent experts appointed by
the government
Recommendations Not binding on the government Binding on the government
Frequency Set up as needed Set up at regular intervals (e.g.,
every 10 years)
Focus Wages and working conditions Pay scales and allowances

10. Impact of Wage Boards and Pay Commissions
Wage boards and pay commissions have played a significant role in
improving the living standards of workers in India.
They have helped to reduce wage disparities and ensure that workers
are paid fair and equitable wages.
They have also helped to improve working conditions and promote
employee well-being.

11. Challenges and Limitations
Wage boards and pay
commissions face some
challenges, such as:
Delays in setting up and
completing their work.
Difficulty in reaching
consensus among
stakeholders.
Difficulty in ensuring that
their recommendations
are implemented
effectively.

12. Conclusion
Wage boards and pay commissions are important mechanisms for
setting wages in India.
They play a crucial role in ensuring fair and equitable compensation
for workers.
While they face some challenges, they continue to be valuable tools
for promoting worker well-being and economic development.

13. Thank You