Last verified: 2026-07-15
Minimum wages and the national floor wage under the wage code work as two connected layers: the Central Government fixes a floor wage as a national baseline under Section 9 of the Code on Wages, 2019, and no state can set its minimum wages below that floor. The Code came into force on 21 November 2025 and replaced four older wage laws, extending minimum-wage protection to every employee rather than only those in listed jobs. But there is a catch that most explainers miss: the statutory floor wage itself has not yet been notified, so the number everyone quotes is a different, non-binding figure.
This article sets out how minimum wages and the national floor wage work under the wage code: what the floor wage is, how minimum wages are fixed, and where the floor wage actually stands in 2026.
The Code on Wages, 2019 folded together four statutes that governed pay in India for decades: the Minimum Wages Act, 1948, the Payment of Wages Act, 1936, the Payment of Bonus Act, 1965, and the Equal Remuneration Act, 1976. What used to be scattered across four laws, each with its own coverage and definitions, now sits in one Code with a single definition of “wages” and one machinery for fixing minimum rates.
The timing matters, and it’s where confusion creeps in. All four labour codes came into force on 21 November 2025. The Code on Wages is therefore live law, not a bill. Yet the headline innovation, a binding national floor wage, is still being worked out: the Ministry of Labour and Employment only began the floor-wage exercise in mid-2026, and no floor wage has been notified yet. So the Code is in force, and the floor wage is not, at the same time.
Minimum wages and the national floor wage under the wage code
Minimum wages and the national floor wage under the wage code sit at two different levels of the same system. The floor wage is one national number the Central Government fixes. The minimum wage is the actual rate the appropriate government sets for a given category of work in a given area, and it can be higher than the floor but never lower. Think of the floor wage as the base of a wall and the minimum wage as where each state chooses to build above it.
That two-layer design is the core idea, and it’s new. Under the old regime there was no statutory national floor at all, only an advisory figure states were free to ignore. The Code on Wages, 2019 changed that by writing a floor wage into the statute and making it binding, so a state’s minimum wage now has a legal bottom it cannot go under.
Why build it this way instead of just having the Centre fix one national minimum wage for everyone? Because wages in India vary enormously by region and by sector. A single national rate would be too high for some local economies and far too low for others. The floor-plus-minimum structure lets the Centre set a dignity baseline while states and the Centre, acting as the appropriate government for their sphere, tune the actual rates to local conditions.
For an employer, the practical reading is simple. You comply with the minimum wage notified for your category and area, and that rate already respects the floor. For a worker, the floor is a promise that wherever you are, your minimum wage cannot legally sink below a nationally set line. This is one strand of the broader shift you can trace across the new labour code compliance checklist for India, where duties that were scattered across many laws were pulled into four codes.
The floor wage under the Code on Wages, 2019
The floor wage under the Code on Wages, 2019 is a national minimum set by the Central Government below which no state’s minimum wage may fall. It lives in Section 9 of the Code on Wages, 2019, and it’s the provision that turns a national wage floor from an advisory suggestion into binding law. Everything else about minimum wages in the Code hangs off this one benchmark.
Section 9 does three things, and they’re worth taking one at a time. First, under Section 9(1), the Central Government fixes the floor wage taking into account the minimum living standards of a worker, and it may fix different floor wages for different geographical areas. So the floor isn’t necessarily a single figure for all of India: the Code expressly allows the Centre to set area-wise floors that reflect different costs of living.
Second, Section 9(2) is the binding bit. The minimum wages fixed by the appropriate government under Section 6 cannot be less than the floor wage. And if a state’s existing minimum wages are already higher than the floor, the state is barred from cutting them down to the floor level. The floor only pushes wages up or holds them steady; it can never be used to justify a reduction.
Third, Section 9(3) sets the process. Before fixing the floor wage, the Central Government may obtain the advice of the Central Advisory Board constituted under Section 42, and consult the State Governments. That consultation step is why fixing the floor wage is not an overnight notification: it runs through a tripartite board of employers, employees and independent members before a number is set.
What area-wise floor wages mean for multi-state employers
For an employer operating across states, the geographical-area power in Section 9(1) is the part to watch. Because the Centre can set different floor wages for different areas, a company with plants in three states could, in principle, face three different floors feeding into three different state minimum-wage schedules. The floor doesn’t flatten regional differences; it just puts a legal bottom under each region.
In practice, though, the floor wage rarely bites for a compliant multi-state employer, because state minimum wages already sit above any realistic floor. The value of the floor for these employers is defensive: it standardises the lowest lawful rung across the country, so an establishment can’t be undercut by a competitor paying below a nationally recognised line. The way wage terms are written into individual contracts, covered in our guide to drafting an employment agreement in India, is where this baseline gets operationalised for each hire.
Where the floor wage stands in 2026
Here’s the point almost every article gets wrong. The Code on Wages is in force, but the statutory floor wage under Section 9 has not been notified. As of mid-July 2026, the Ministry of Labour and Employment had only just begun the floor-wage exercise, revising the consumption baskets used to calculate it and moving to constitute the Central Advisory Board that Section 9(3) requires.
So when someone asks “what is the national floor wage in India,” the honest answer in 2026 is that the statutory one doesn’t have a notified figure yet. What exists is a separate, older, non-binding number that predates the Code, and conflating the two is the single most common error on this topic. We break that distinction down in its own section below, because getting it right is what separates an accurate answer from a repeated myth.
How minimum wages are fixed under the Code
Minimum wages under the Code are fixed by the appropriate government, which sets a minimum rate that an employer must pay and can revise over time. The duty itself is blunt: under Section 5 of the Code on Wages, 2019, no employer shall pay to any employee wages less than the minimum rate of wages notified for that work. Everything after Section 5 is about how that rate gets built and revised.
Section 6 is where the rate is actually fixed. The appropriate government sets a minimum rate for time work and, separately, for piece work, and where workers are on piece rates it still secures them a minimum on a time-work basis. Rates can be fixed by the hour, by the day, or by the month. The Code nudges governments to keep the number of different minimum rates as low as practicable, rather than splintering wages into hundreds of micro-categories.
So what actually decides the number? Section 6 lists the factors. The appropriate government primarily considers the skill of workers, sorted into unskilled, skilled, semi-skilled and highly-skilled, and the geographical area, or both together. It may additionally weigh the arduousness of the work: temperature or humidity that is hard to bear, hazardous conditions, or underground work. A hazardous, highly-skilled job in a high-cost city therefore lands at a very different minimum from unskilled work in a low-cost rural area, which is the whole point of a factor-based system.
What the minimum wage is made of
The components come from Section 7. A minimum wage can take one of a few forms: a basic rate of wages plus a cost-of-living allowance (commonly the dearness allowance), or an all-inclusive rate that already folds the allowance in. This is what lets minimum wages track inflation without a fresh full revision each time: the dearness component is adjusted periodically while the basic rate holds.
That inflation-tracking piece is usually the variable dearness allowance, or VDA, which appropriate governments typically revise twice a year, around April and October. For a payroll team, the VDA revisions are the ones that come around most often, so wage schedules need to be checked on that cadence rather than set once and forgotten. Overtime, hours and leave interact with these wage rates too, which we cover in the guide to working hours, overtime and leave under the labour codes.
How often minimum wages are revised
The Code sets an outer limit on how stale a minimum wage can get. Under Section 8, the appropriate government reviews and revises minimum wages at intervals not exceeding five years. That five-year ceiling is a floor on frequency, not a target: nothing stops a government revising sooner, and the VDA adjustments happen in between regardless.
Who is the appropriate government for a given workplace? For central-sphere establishments such as railways, mines, oilfields, major ports, banking, telecom and central public-sector undertakings, among others, it’s the Central Government. For everyone else, it’s the State Government of the state where the establishment operates. That split decides which notification an employer follows, and it’s the first thing to pin down before checking any wage schedule.
Floor wage, minimum wage and the national floor level minimum wage
The floor wage, the minimum wage and the national floor level minimum wage are three different things, and mixing them up is how most confusion on this topic starts. One is a statutory national baseline. One is the actual enforceable rate you pay. And one is an older administrative figure that is neither of the first two. Getting these apart is the most useful thing a reader can take from this article.
The floor wage is the statutory national baseline under Section 9 of the Code on Wages, 2019, set by the Central Government, binding on the states, and, as of 2026, not yet notified. The minimum wage is the operative rate fixed by the appropriate government under Sections 6 to 8 for a category of work in an area; it’s what an employer must actually pay, and it already sits at or above the floor. So far, so clean.
The third term is where people trip. The national floor level minimum wage, or NFLMW, is an administrative benchmark that has existed since long before the Code. It grew out of the recommendations of the National Commission on Rural Labour in 1991, and the Centre used it to “advise” states on a minimum baseline. Crucially, it was never statutory and never binding: a state could pay below it without breaking any law. It’s the number people mean when they say “the national floor wage,” even though, strictly, it isn’t the Section 9 floor wage at all.
Now, the figure. The NFLMW was last revised to Rs 176 per day, up from Rs 160, with effect from 2017, per the Ministry of Labour and Employment’s own position. You will very often see “Rs 178” quoted instead. That figure was announced in mid-2019 but never formally notified in the Gazette, so it entered circulation and stuck, even though the official administrative figure remained Rs 176. If you take one correction from this piece, make it that one: the operative NFLMW figure is Rs 176 per day, not Rs 178.
Does the NFLMW still matter, then? In practice, barely. Every state’s minimum wages already exceed Rs 176 a day, so the old benchmark is effectively symbolic. Its real successor is the statutory floor wage under Section 9, which, once notified, will do the same job with legal teeth the NFLMW never had. Until that notification lands, India is in an in-between phase: a binding floor on the statute book, an outdated advisory figure in common usage, and no notified statutory number bridging them.
What the Code changed from the Minimum Wages Act, 1948
The Code on Wages changed the minimum-wage regime in four concrete ways compared with the Minimum Wages Act, 1948, and each one widens protection or tightens consistency. The old Act wasn’t repealed in isolation; it was absorbed into the Code along with three other wage laws, so the changes come as a package rather than a single amendment.
The biggest change is coverage. The Minimum Wages Act, 1948 applied only to “scheduled employments,” a list of jobs each government notified, which left large swathes of workers outside the minimum-wage guarantee entirely. The Code on Wages, 2019 drops the schedule and applies minimum wages universally, to every employee in every establishment. A worker in an unlisted job who had no statutory minimum before now has one.
The second change is the floor wage itself. The 1948 Act had no statutory national floor; the only national figure was the advisory NFLMW, which states could ignore. Section 9 of the Code replaces that soft benchmark with a binding statutory floor, giving the national baseline the legal force it always lacked.
The third change is definitional. The four old laws each defined “wages” differently, which created endless disputes about what counted for minimum wages, for bonus, or for overtime. The Code sets a single definition of “wages” in Section 2(y), used across all four labour codes, with a rule that basic pay plus dearness and retaining allowance must make up at least half of total remuneration. That “50 percent rule” stops employers from shrinking the wage base by loading pay into allowances.
The fourth change is consolidation and equal pay. Four statutes became one Code, so an employer reads one law on pay instead of four. And the Equal Remuneration Act, 1976 was folded in, carrying its gender-neutral pay and recruitment protections into the same instrument that governs minimum wages, rather than leaving them in a separate law. The mandatory five-year revision cycle for minimum wages, familiar from the old regime, carries forward into Section 8 of the Code.
Compliance, revision and penalties
Compliance under the Code on Wages turns on paying at least the notified minimum wage, keeping the records that prove it, and settling wages on time, with real penalties for getting it wrong. The enforcement architecture is not the old inspector model either: the Code uses an inspector-cum-facilitator who is meant to advise employers on compliance as well as inspect, which changes the tone of an inspection even if the underlying duties are strict.
Start with the money duties. An employer must pay the notified minimum wage for the correct skill category and area, respect the floor wage baked into that rate, and revise pay when the state or Centre revises the schedule, including the twice-yearly VDA changes. The minimum wage is reviewed at least every five years under Section 8, so a rate that felt current three years ago may already be behind a fresh notification.
Then the penalties, which have teeth. Under Section 54 of the Code on Wages, 2019, an employer who pays an employee less than the amount due under the Code can be fined up to Rs 50,000 for a first offence. Repeat the same offence within five years, and it escalates to imprisonment up to three months, or a fine up to Rs 1,00,000, or both. For other contraventions of the Code, the first-offence fine runs up to Rs 20,000, rising to imprisonment up to one month or a fine up to Rs 40,000 on repetition. The gap between a Rs 50,000 underpayment fine and a Rs 20,000 general one signals where the Code is strictest: on actually paying people what they’re owed.
What does an employer do when a notice lands despite best efforts? The practical response, from producing wage registers to answering the specific allegation rather than the whole Code, is a skill in itself, and our guide to responding to labour authority notices walks through it. For a broader primer on how the Code fits the wider reform, the iPleaders explainer on what you need to know about the Code on Wages, 2019 is a useful companion read.
The bottom line for compliance is that the wage number is only half the job. The other half is the paper trail: the register showing the category and area applied, the VDA revisions tracked, and the timely payment recorded. An employer who pays correctly but can’t prove it is still exposed, because in a dispute the burden of showing lawful payment sits with the establishment, not the worker.
Frequently asked questions
1. Is the Code on Wages, 2019 in force? Yes. All four labour codes, including the Code on Wages, 2019, came into force on 21 November 2025. The Code is live law, though several rules are still being finalised and the statutory floor wage under Section 9 has not yet been notified.
2. What is the difference between the floor wage and the minimum wage? The floor wage is the national baseline the Central Government fixes under Section 9 of the Code on Wages, 2019. The minimum wage is the actual rate the appropriate government sets under Sections 6 to 8 for specific work in a specific area. A minimum wage can be higher than the floor wage but never lower.
3. What is the national floor wage in India right now? The statutory floor wage under Section 9 has not been notified as of mid-2026, so it has no fixed figure yet. The older, non-statutory National Floor Level Minimum Wage is Rs 176 per day, in effect since 2017, but it is advisory and not legally binding on states.
4. Is the national floor level minimum wage Rs 176 or Rs 178? It is Rs 176 per day, revised from Rs 160 with effect from 2017, per the Ministry of Labour and Employment. The Rs 178 figure was announced in mid-2019 but never formally notified in the Gazette, so it is widely repeated but not the official administrative figure.
5. Which laws does the Code on Wages, 2019 replace? Four: the Minimum Wages Act, 1948, the Payment of Wages Act, 1936, the Payment of Bonus Act, 1965, and the Equal Remuneration Act, 1976. They were consolidated into a single Code with one definition of “wages.”
6. Who fixes minimum wages under the Code? The appropriate government. That is the Central Government for central-sphere establishments such as railways, mines, oilfields, major ports, banking, telecom and central public-sector undertakings, among others, and the relevant State Government for all other establishments.
7. Can a state set its minimum wage below the floor wage? No. Section 9(2) says minimum wages fixed under Section 6 cannot be less than the floor wage. If a state’s existing minimum wages are already higher than the floor, it also cannot cut them down to the floor level.
8. What factors decide the minimum wage rate? Under Section 6, the appropriate government primarily considers the skill of workers (unskilled, skilled, semi-skilled or highly-skilled) and the geographical area. It may additionally weigh the arduousness of the work, such as extreme temperature, humidity, hazards or underground work.
9. How often are minimum wages revised? At intervals not exceeding five years under Section 8 of the Code on Wages, 2019. The dearness allowance component, the variable dearness allowance, is usually revised twice a year, around April and October.
10. Does the minimum wage under the Code apply to all workers? Yes. Unlike the Minimum Wages Act, 1948, which covered only scheduled employments, the Code applies minimum wages universally to every employee in every establishment, regardless of the sector or job.
11. What is the penalty for paying less than the minimum wage? Under Section 54, paying less than the amount due can attract a fine up to Rs 50,000 for a first offence. A repeat of the same offence within five years can lead to imprisonment up to three months, or a fine up to Rs 1,00,000, or both.
12. When will the statutory floor wage be notified? There is no notified date as of mid-2026. The Ministry of Labour and Employment began the floor-wage exercise in 2026, including revising the consumption baskets and constituting the Central Advisory Board that Section 9(3) requires before a floor wage is fixed.
13. Is the floor wage the same across all of India? Not necessarily. Section 9(1) allows the Central Government to fix different floor wages for different geographical areas, so the floor can vary by region to reflect different costs of living, rather than being a single national figure.
References
Case Law
No Supreme Court or High Court judgment has yet interpreted the floor-wage or minimum-wage provisions of the Code on Wages, 2019. Section 9 has not been notified, and the Code has been in force for under a year, so the floor-wage and revised minimum-wage questions have not yet reached the courts. This article is therefore anchored to the statutory text and the Ministry of Labour and Employment’s stated position rather than to case law.
Statutes
- Code on Wages, 2019 (Act No. 29 of 2019; in force 21 November 2025). Provisions cited: Section 5 (payment of minimum wages), Section 6 (fixation of minimum wages and factors), Section 7 (components of minimum wages), Section 8 (procedure and five-year review), Section 9 (floor wage), Section 42 (Central Advisory Board), Section 54 (penalties), Section 2(y) (definition of wages).
- Minimum Wages Act, 1948 (superseded and subsumed by the Code on Wages, 2019). Cited for the scheduled-employment coverage it applied before the Code.
Government and secondary sources
- Ministry of Labour and Employment, position on the National Floor Level Minimum Wage of Rs 176 per day (with effect from 2017), and the 2026 exercise to fix the statutory floor wage under Section 9.
- Press Information Bureau, notification that the four labour codes came into force on 21 November 2025.
- PRS Legislative Research, the Code on Wages, 2019 (legislative history, passage and assent dates, appropriate-government split).
This article is for informational purposes only and does not constitute legal advice. For specific legal guidance, consult a qualified legal professional.
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