Law relating to wages and bonus
Law relating to wages and bonus : Theories of wages: marginal productivity, subsistence, wage fund, supply and demand, residual claimant, standard of living, Concepts of wages (minimum wage, fair wage, living wage, need-based minimum wage)
Laws relating to wages and bonus:
The Payment of Wages Act, 1936:
This act regulates the payment of wages to workers and ensures they receive their wages promptly and without any illegal deductions or delays.
The Minimum Wages Act, 1948:
This act establishes a minimum wage that employers must pay to their workers, taking into account the cost of living.
The Payment of Bonus Act, 1965:
This act mandates the payment of a bonus to employees who meet certain criteria, such as working for a minimum number of days and earning a salary below a specified limit.
Theories of wages:
Marginal Productivity Theory:
This theory states that a worker's wage is determined by the value of their marginal product, which is the additional output produced by hiring one more worker.
Subsistence Theory:
This theory suggests that wages are determined by the cost of living, meaning workers are paid just enough to survive.
Wage Fund Theory:
This theory proposes that wages are determined by a fixed fund of money available to employers, which is then divided among the workers.
Supply and Demand Theory:
This theory, like in many markets, states that wages are determined by the interaction of the supply of labor and the demand for labor.
Residual Claimant Theory:
This theory states that wages are what is left over after all other costs of production (rent, interest, profits) have been paid.
Standard of Living Theory:
This theory suggests that wages are determined by the workers' standard of living and their expectations for what they should earn.
Concepts of wages:
Minimum Wage:
The lowest legal wage that an employer can pay to a worker.
Fair Wage:
A wage that is considered equitable and just, taking into account the worker's skills, experience, and the prevailing market rates.
Living Wage:
A wage that is sufficient for an individual or family to meet their basic needs and maintain a decent standard of living.
Need-Based Minimum Wage:
A wage calculated based on the cost of living and essential needs, aiming to ensure that workers can afford basic necessities.
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