Mahadevappa A., a casual worker at a factory in Jigani, was elated when in April 2025, he was informed of an impending hike in his salary after the government notified increase in minimum wages across sectors of employment.

Nearly a year later, his mood, and that of thousands of workers like him, is no longer upbeat. The notification proposing the hike has remained a draft, with the government dithering on finalising the wage hike.

In his late 30s and a native of T. Narasipura in Mysuru district, Mahadevappa has been working as a casual worker for nearly two decades now. His current gross salary is about ₹15,300 per month, and he had his hopes pinned on the hike to cope with escalating cost of living. “The rent is high and add to it the high school fee. Cost of every food item has gone up too. How do you expect a family to lead a decent life with what we earn?” he asked. He and many of his colleagues have been taking up overtime jobs to earn additional income, but at the cost of social life. His spouse also takes up odd jobs to augment the family income.

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Over 1.77 crore workers

For more than three years now, over 1.77 crore workers like Mahadevappa, covered by the Minimum Wages Act, 1948, are desperately waiting for a revision. Though the Act mandates revision of wages at least once in five years, this cycle of revision — due in 2022-23 — has not been completed yet. It has been nine years since the last wage revision process was completed in 2016-17.

Bringing hopes in desperate times, the State government on April 11, 2025 proposed fresh minimum wages ranging from ₹25,714 per month for unskilled worker to ₹34,225 per month in Zone 1, which includes Bengaluru; to ₹19,319 per month for unskilled worker to ₹28,285 per month for highly skilled worker in Zone 3. The draft, for the first time, fixed minimum wages for 18 scheduled employments apart from revising minimum wages in the rest. Minimum wages have been notified in a total of 81 scheduled employment.

How it was calculated

For the first time in Karnataka, guidelines laid down by Supreme Court in the landmark Raptakos Brett case in 1992 was followed to arrive at the wages. In a departure from the past minimum wage revision, Karnataka considered non-vegetarian diet to calculate the cost of food (2,700 calories per consumption unit) to form the minimum wage matrix. The inclusion of non-vegetarian diet has been a long-standing demand of the labour unions, which have argued that about than 80% of the State’s population consumes meat.

Immediately after the draft was published, the industry bodies took exception to what they termed as “steep hike”, and petitioned the government against its implementation. The draft received more than 150 objections/ suggestions from the industries/ industry bodies.

With the Karnataka State Minimum Wages Advisory Board, a tripartite body with members from industries, unions and government, delving on the issue, also unable to come to any conclusion after two meetings, the decision is now with the government. As deliberations at the government level are still under way, four cases landed up in Karnataka High Court against the proposed revision.

Will hurt MSMEs

“The proposed hike is too steep and will affect the viability of the MSME sector where 93% of the workforce in Karnataka is employed,” said B.C. Prabhakar, president of Karnataka Employees’ Association (KEA), which was a petitioner in one of the cases before the Karnataka High Court. He argued that a hike at this scale is disadvantageous to the MSMEs in Karnataka when compared to MSMEs in neighbouring States where minimum wages are lower.

Uma Reddy, president of Federation of Karnataka Chamber of Commerce and Industry (FKCCI), concurred and said, “Minimum wages should be comparable with other States and neither too low nor too high. With high wages, it will be difficult for the sector to grow.” She said the government should either incentivise the enterprises to pay higher wages or exclude the micro and small enterprises from the policy framework. “Micro and small enterprises cannot be in the same bracket with large industries.”

On the other hand, the unions, which have welcomed the draft notification and seek its implementation, point to critical flaws in the method of calculation adopted that they claim have depressed the proposed minimum wages by at least 20%. Along with the cost of food, clothing and shelter, the wage calculation should also consider new age requirements such as mobile phone and data bills, the unions have said and also pointed out that rate of Variable Dearness Allowance (VDA) increase has not kept pace with inflation.

Erosion of wages

The compounded inflation rate in Karnataka between 2012 and 2024 has been calculated to be at 208.3%. The wage increase in these scheduled employments is calculated in terms of VDA, statutorily announced once a year by the State government. Considering the VDAs announced in the corresponding period, the quantum of wage increase is ₹5,814 per month. If one were to get a monthly salary of ₹10,000 in 2012, the salary would have increased to ₹15,814, which is roughly 58% increase, showing that the annual wage increase through VDA does not catch up with inflationary trends.

General secretary of Centre of Indian Trade Unions (CITU) Meenakshi Sundaram feels that it is critical to guard against the erosion of real wages of the workers. “Not only should the purchasing power be protected, but also provide for them to participate in the economy. Minimum wage is already a subsistence wage. The tinkering of the Consumer Price Index based on which the minimum wages are arrived at causes further injustice to the workers.”

Even as the hiring of casual labour increases in both government and in large industries against the permanent work force since labour cost is cheap, the lower minimum wage is leading to exploitation, warned the All India Trade Union Congress (AITUC) general secretary D.A. Vijaybhaskar. “In order to reduce the exploitative gap between the permanent and contract workers, it is essential to increase the minimum wage based on real needs.”

The genesis of the minimum wage imbroglio goes back to 2022-23 when the current cycle of revision commenced during the BJP government with notification of revised minimum wages for 36 employments with a hike ranging from 5% to 10%. The AITUC, which termed the hike as unilateral and flagged that the guidelines of Reptacos Brett had not been followed, approached the High Court of Karnataka, which eventually stayed the draft. After the Congress government came to power, a fresh wage revision was announced based on Apex Court laid down guidelines in April 2025.

Garment sector issues

Even as the government took up wage revision in 81 scheduled employments, 19 employments, including garment work, have been excluded. Unions in the garment industry that employs about four lakh women have been fighting for fair wages for over a decade now. Over the last four decades, attempts to increase minimum wages in 2009, 2010 and 2018 have resulted in court cases, inordinately delaying the revision.

“Instead of a hike in minimum wage, we get an increased VDA hike. There is a huge gap between the VDA and general price rise. Unions are not there to negotiate. Workers are simply suspended for raising their voice,” said a worker at a garment factory in Bommasandra. “After 19 years of work, my take home salary does not exceed ₹15,000. House rents have gone up in Bommasandra after the metro connectivity. Legislators’ salaries get increased every now and then, but every effort to raise minimum wages is stonewalled,” said the worker, who wished to remain anonymous.

Wages have also been fixed arbitrarily, and absence of factory-level workers’ unions have compounded the problems. In 2018, basic wage was initially increased to ₹459.81 per day for unskilled workers in Zone 1, which was withdrawn later and downwardly revised to ₹349.44 per day in 2019 after a tripartite committee decision in which government and industry representatives voted together against the garment workers’ demand. In 2023, basic wage was increased to ₹401.07 per day for unskilled and ₹434.48 for highly skilled workers per day.

Currently, an unskilled worker is paid ₹12,818 per month and semi-skilled worker is paid ₹13,085 a month, while a highly skilled worker gets paid ₹ 13,686 per month.

“The government has revised the basic wage without considering ground realities both in 2018 and 2023. What was fixed in 2023 is far less than what was initially proposed in 2018 when wage revision was common for all 81 scheduled employment,” R. Prathiba, president of Garments and Textiles Workers’ Union (GATWU) said. By deliberately keeping the garment sector away from the minimum wage revision, the government is causing injustice to the workers, who are mostly women, she added.

The wage has been an issue in the garment industry as the Indian garment industry competes in a highly price sensitive international market with other countries. There is a general difference of about ₹4,000 to ₹5,000 in monthly minimum wage between garment workers and workers in other employments.

For instance, the prevailing minimum wage for highly skilled jobs in the garment industry fetches ₹13,686 per month against ₹19,468 for a highly skilled job in the automobile sector in Zone 1. In the past, unions have tried bring pressure on wage hike implementation through international campaigns. “The historical injustice to garment workers has continued with the government deciding to initiate wage hike through a committee. There has been no fixed time frame too,” said GATWU joint secretary K.R. Jayaram.

Shadow of Labour Codes

Meanwhile, as the State government dithered over finalising the wage revision, the notification of four Labour Codes by the BJP-led Union Government on November 21, 2025, seems to have complicated the decision-making though unions have repeatedly pointed out that the Codes do not come in the way of revising minimum wages. The new Industrial Codes have subsumed The Payment of Wages Act, 1936, Minimum Wages Act, 1948, the Payment of Bonus Act, 1965 and Equal Remuneration Act, 1976 – all related wages to workers — even as the concept of scheduled employments has been done away with.

Both labour unions and the management representatives have been differing in their point of view over implementation of minimum wages after the four new Codes came into force. “Legally, there is no scheduled employment now and the Minimum Wages Act has been repealed with the notification of Code on Wages, 2019. The power to fix minimum wages under old Acts has been taken away by the new Code. The State government can fix new minimum wages only after the Centre fixes the floor wage,” Mr. Prabhakar argued.

The Joint Committee of Trade Unions (JCTU), an umbrella platform bringing together nine trade unions in Karnataka, however, has pointed out provisions in the Codes that do not bar implementation of the minimum wages. The JCTU, in its memorandum in December, 2025, urging the government to implement minimum wages immediately, has said that the provisions in the Code on Wages provide ample opportunities to the government to ensure that the process/ action of revision of minimum wages, under way and nearing completion, can be continued under the new Labour Code as well.

The Labour Department, meanwhile, is learnt to have sought opinion from the Law Department over implementation of the minimum wages in the light of Codes coming into effect. The Department sources say that the decision on the minimum wages will only be made in consultation with Chief Minister Siddaramaiah, even as the AITUC plans a State-wide protest against the delay in implementation of minimum wages on March 5.