EPFO EO/AO 2023 General Ability Test · Question 27 of 120

Correct — B, (b) A guaranteed time rate. The stem is very close to a verbatim lift of section 3(2)(c) of the Minimum Wages Act, 1948, which empowers the appropriate Government to fix 'a minimum rate of remuneration to apply in the case of employees employed on piece work for the purpose of securing to such employees a minimum rate of wages on a time work basis', and then names that rate, in the statute's own brackets, 'a guaranteed time rate'. The substance behind the label is worth holding on to. A piece-rate worker is paid by output, so in a week when material runs short, machines fail or the work is slow, his earnings can collapse through no fault of his own. The guaranteed time rate is the floor underneath him: however little he produces, he must receive at least what the time-based minimum would have given him for the hours worked. It is a piece-rate worker protected by a time-rate guarantee, and the name says exactly that — 'guaranteed' because it is a floor, 'time rate' because the floor is computed on a time basis.

• (a)A minimum piece rate — This is the statutory term from section 3(2)(b) — 'a minimum rate of wages for piece work'. It is the minimum the employer must pay per unit of output, which is a rate for the piece work itself and not a guarantee computed on time. It is the closest distractor because both this and the answer concern piece workers; the difference is the basis of computation, which the stem states explicitly ('on a time work basis').
• (c)A minimum time rate — This is section 3(2)(a) — 'a minimum rate of wages for time work'. It applies to workers who are employed on time work in the first place, whereas the stem is expressly about employees working on piece work. Half the phrase is right, which is what makes it attractive; the half that is wrong is the half the stem tells you about.
• (d)A guaranteed piece rate — There is no such term in the Act. It is manufactured by crossing the two real ones — taking 'guaranteed' from clause (c) and 'piece' from clause (b). Recognising that a printed option is not a statutory expression at all is a useful skill in this paper: section 3(2) defines exactly four rates, and the fourth is the overtime rate under clause (d), not a guaranteed piece rate.

Section 3(2) of the Minimum Wages Act, 1948 is a definitional subsection that a candidate should be able to recite. It authorises the appropriate Government to fix four kinds of rate, each christened in the statute itself: a minimum time rate (clause a), a minimum piece rate (clause b), a guaranteed time rate (clause c) and an overtime rate (clause d). The scheme is deliberately symmetrical — two rates for the two ways of paying, one guarantee protecting piece workers against the volatility of their own method of payment, and one substituted rate for hours worked beyond the normal working day. Section 3(3) then allows different rates for different scheduled employments, for different classes of work, for adults, adolescents, children and apprentices, and for different localities.

The EO/AO paper likes items where the stem is the statutory language and the options are the statutory labels, because they cannot be answered by common sense — only by having read the section. This item is the purest example of that in the labour block: nothing in the stem is a puzzle, and everything in it is section 3(2)(c). An Enforcement Officer inspecting a piece-rate establishment has to know which of the four rates the register in front of him is supposed to reflect.

• Minimum Wages Act, 1948, section 3(2) — the appropriate Government may fix four rates: minimum time rate, minimum piece rate, guaranteed time rate and overtime rate.
• Section 3(2)(c) defines the guaranteed time rate — a minimum rate of remuneration for piece workers, securing them a minimum wage on a time work basis.
• Section 3(3) permits different minimum rates for different scheduled employments, classes of work, age groups and localities.
• Section 2(g) defines 'scheduled employment' — an employment specified in the Schedule to the Act.
• Section 4 sets out what a minimum rate of wages may comprise, including a basic rate and a cost-of-living allowance.
• Section 5 lays down the two procedures for fixing or revising rates — the committee method and the notification method.
• Section 12 obliges the employer to pay not less than the minimum rate; section 20 provides the claims machinery.
• The Minimum Wages Act, 1948 has been subsumed into the Code on Wages, 2019 along with the Payment of Wages Act, the Payment of Bonus Act and the Equal Remuneration Act.

• Choosing 'minimum piece rate' because the stem mentions piece work. The stem also says the securing is 'on a time work basis', which is the deciding phrase.
• Treating 'guaranteed piece rate' as a real statutory term. It is not; the Act names only four rates.
• Forgetting the fourth rate. If an option set includes 'overtime rate', it belongs to section 3(2)(d) and is equally real.
• Assuming minimum wage fixing applies to every employment. Under the 1948 Act it operates only in scheduled employments; the Code on Wages, 2019 is what universalises it.

Minimum Wages items in EPFO EO/AO come in two shapes — definitional recall out of sections 2 and 3, and procedural recall out of section 5. Both are answered by having the section numbers attached to the concepts, which is also what makes the answer defensible in the enforcement work the post involves.

No directly related past PYQ was found.

• practice — not a real PYQ

  Under section 3(2) of the Minimum Wages Act, 1948, which one of the following is NOT a rate that the appropriate Government is empowered to fix ?

  • (a)A minimum time rate
  • (b)A guaranteed time rate
  • (c)A guaranteed piece rate
  • (d)An overtime rate

  Answer(c) A guaranteed piece rate

• practice — not a real PYQ

  The two methods by which the appropriate Government may fix or revise minimum rates of wages under the Minimum Wages Act, 1948 are laid down in :

  • (a)Section 3
  • (b)Section 4
  • (c)Section 5
  • (d)Section 12

  Answer(c) Section 5