The Government of Odisha has recently updated the minimum wage structure for employees in various sectors, effective from 1st October 2024 to 31st March 2025. These updates are crucial for employers and employees to ensure compliance and fair wages. In this blog, we provide an in-depth analysis of the new wage structure, including the introduction of the Variable Dearness Allowance (VDA) and how it impacts different categories of workers.

1. Introduction to Minimum Wages in Odisha

The concept of minimum wages is designed to protect workers in unorganized sectors from exploitation and ensure they receive a fair wage for their labour. The wages are revised periodically to reflect changes in the cost of living, inflation, and economic conditions. The minimum wage in Odisha is applicable to 91 scheduled employments, which range from agriculture to manufacturing, service sectors, and more.

The Odisha government, through its Labour and ESI Department, has issued the latest revision via a notification that affects all employees under various skill categories.

2. The Revised Minimum Wage Structure

Effective from 1st October 2024, the revised wages are as follows:

a. Unskilled Labour

This category generally includes employees engaged in simple, repetitive tasks that require little to no special training or education. From October 2024, the minimum wage for unskilled labour will be ₹452 per day, including the VDA.

b. Semi-skilled Labour

Semi-skilled workers are those who possess some training or skill, but whose work may not require a high level of expertise. The minimum wage for semi-skilled workers has been revised to ₹502 per day.

c. Skilled Labour

Workers with specialised training or expertise fall under this category. Their wage is now ₹552 per day, reflecting their proficiency and value to their employers.

d. Highly Skilled Labour

Highly skilled workers, who are often in positions of responsibility, will now receive ₹602 per day as the minimum wage.

3. Understanding Variable Dearness Allowance (VDA)

A crucial component of the wage revision is the Variable Dearness Allowance (VDA), which is designed to offset the impact of inflation and rising costs of living. The VDA in Odisha is linked to the All India Consumer Price Index (CPI) for industrial workers.

For the period beginning October 2024, the VDA has been set at ₹2 per day for all categories of workers. This increase is based on a 0.8-point rise in the CPI (from 138.8 to 139.6), highlighting a slight but important adjustment to account for inflation. While the VDA increase is marginal, it indicates a proactive step by the government to address the cost-of-living concerns.

4. Impact on Various Employment Sectors

The minimum wage is applicable across 91 scheduled employments, affecting a wide variety of sectors. Some of the major sectors include:

• Agriculture: The backbone of Odisha’s economy, employing a large portion of the workforce. The wage increase will benefit both seasonal and permanent agricultural workers.
• Automobile services and workshops: A booming sector with growing demand for skilled and semi-skilled labour.
• Construction: Includes road construction, dam maintenance, and building operations, a sector that requires a mix of unskilled and skilled labour.
• Private Security Services: An area where the demand for semi-skilled and skilled security personnel is increasing rapidly.
• Educational Institutions: Non-teaching staff in private educational institutions, including ITI and training centres, will benefit from the new wage structure.
• Hospitality (Hotels, Eating Houses, and Restaurants): The hospitality industry is a significant employer in Odisha, and workers in this sector, especially in tourist hotspots, will see wage improvements.

5. Compliance for Employers

Employers in Odisha are mandated to adhere to these revised wage rates and ensure that all employees are paid accordingly. Non-compliance can result in penalties, and businesses must stay updated with notifications issued by the Labour and ESI Department. It is advisable for employers to adjust payroll systems in advance to avoid delays in implementation.

Furthermore, employers in sectors like construction, security services, and hospitality should be particularly vigilant, as these industries often employ large numbers of unskilled and semi-skilled workers.

6. Key Benefits of the Wage Revision

The wage revision for October 2024 brings several benefits to both workers and employers:

• Improved Standard of Living: Even a modest increase in wages can significantly impact the purchasing power of workers, enabling them to better meet their daily needs.
• Enhanced Workforce Motivation: Fair wages play a crucial role in increasing employee morale and reducing turnover rates.
• Inflation Protection: The introduction of the VDA helps workers protect their real income from being eroded by inflation.

7. Future Projections and Trends

As inflationary pressures continue, it is expected that wage revisions will take place periodically. The State Minimum Wages Advisory Board is likely to monitor the situation and suggest revisions every six months, ensuring that the wages remain aligned with economic realities.

Moreover, with Odisha focusing on infrastructure development and industrial growth, the demand for both skilled and unskilled labour is expected to rise. This could lead to further wage increases, particularly in high-growth sectors like construction, manufacturing, and IT services.

8. Conclusion

The new minimum wage notification from the Odisha government represents a critical update for both employers and employees. As we move into the next half of the fiscal year, it is important for businesses to remain compliant and ensure fair wages are provided. For workers, this increment, although modest, reflects a growing awareness of their rights and the state’s commitment to protecting them.

Employers are advised to update their payroll systems and prepare for inspections from the Labour Department to avoid any penalties for non-compliance. Workers, on the other hand, should stay informed about their rights to ensure they receive the wages they are entitled to.

Stay tuned for more updates on labour laws and wage revisions across other states as the landscape of employment regulation continues to evolve.