Quite often we hear the term “wage rate” but a lot of people don’t fully understand its purpose and they’re also not completely aware of the fact that employers aren’t supposed to pay their workers below a set amount of money for their services. So, if you want to know more about these concepts, then you’ve come to the right place because in this guide we’ll shed light on minimum wage and how it’s fixed in different provinces of Pakistan.
What Is Minimum Wage?
Minimum wage is remuneration or compensation that an employer gives in the form of money against the work an employee does. The employers are legally bound to pay the minimum amount and the employees can not sell their services or labour under the set minimum wage.
The minimum wage is proposed and approved by the government which means that anyone who does not adhere to the approved wage rate will be in violation of the law. Getting paid minimum wage against the services provided is the basic right of every skilled and unskilled worker.
Prohibition To Not To Pay Minimum Wage
An employer can’t pay a worker wage below the rate declared by the government even if the employee comes under the category of unskilled labour. Labourers in Pakistan are the ones comparatively less aware of their minimum wage right and agree to offer services lower than the minimum wage rate. No employer has the right to require or authorize reduced wage rates for any employee.
Even if the employee is under a contract, they are entitled to receive the set minimum wage rate and can receive wage and benefits higher than the set standards.
Any employer who does not abide by the law and found contravening it shall be punished with a fine or imprisonment for a term or both. In addition to that, the employers will also be liable to pay the difference in amount for the period they have rendered services from the employees.
Workers’ Minimum Wage In Different Provinces Of Pakistan
Just recently, the federal government of Pakistan has announced its annual budget for the fiscal year 2021-22 in which they have also talked about the minimum wage rate of workers. It has been announced in the budget that the minimum wage rate in Pakistan will be raised to PKR 20,000 which was previously set at PKR 17,500.
The Sindh Cabinet in favour of the workers decided to set their minimum wage rate at PKR 25,000 which is PKR 5,000 more than that set by the federal government.
Chief Minister of Punjab Usman Buzdar announced the good news for the workers by increasing the minimum wage rate from PKR 18,000 to PKR 20,000. In comparison to Sindh, the minimum wage rate is lower in Punjab but Buzdar also talked about rising in different grants that are specifically for the workers and labourers. The marriage grant for workers has been raised 100% from PKR 100,000 to PKR 200,000 while the death grant has been raised 20 percent from PKR 500,000 to PKR 600,000. In addition to these, the Punjab Government has also given houses to workers in Lahore, Nankana Sahib and Multan along with scholarships to the children of labourers.
The government of Khyber Pakhtunkhwa has not presented its annual budget for FY 2021-22, but it is expected that the minimum wage rate in the province will be increased to PKR 21,000. The provincial government is also expected to set up task forces to ensure the implementation of the minimum wage policy.
Advantages Of Minimum Wage
The first and foremost advantage of setting a minimum wage rate is protecting the skilled and unskilled labour class against exploitation. Employers can be punished by law if they are caught paying less than the standard minimum wage.
Minimum wage is a potential economic booster because if it is increased, it gives more spending power to the consumers and as a result, there is more cash revolving in the market and the country flourishes.
The minimum wage sets a benchmark for the minimum income one can get. So, if there is a rise in unemployment in a country, people can work as skilled or unskilled labour and be able to pay their bills. Through this, poverty will also be reduced because people will at least be working on minimum wages.
Some employers want their profits to increase and their expenses to be lowered. The minimum wage law protects workers against them. On the other hand, if the workers are paid slightly higher than minimum wage, the employer is not only liked by its staff but also boosts the morale of the workers. According to various studies, monetary benefits have a positive impact on employee performance and job satisfaction which leads to a higher retention rate.
So, this was all you needed to know about minimum wages in Pakistan. If you found this blog informative, you may also like to read about the service at your doorstep initiative of the Punjab Government, the effects of government development schemes on the economy and trophies of Khyber Pakhtunkhwa.