A minimum wage in Tamil Nadu has two parts. A basic rate, fixed by government order for each scheduled employment and varying by zone and skill, and a dearness allowance recalculated every 1 April from Chennai's consumer price index. The Code on Wages 2019 now governs both, but the rates still come from orders made under the old Minimum Wages Act, and the national floor wage meant to sit beneath them has not been fixed.
What the Code on Wages requires
No employer may pay any employee less than the minimum rate the appropriate government notifies. That is section 5 in full, and the "any employee" matters: the Minimum Wages Act 1948 applied only to scheduled employments, while the Code applies the duty to every employee. For a factory or warehouse in Tamil Nadu the appropriate government is the State.
| Section | What it says |
|---|---|
| s.5 | No employer shall pay any employee less than the notified minimum rate |
| s.6(6) | Rates are fixed primarily by skill (unskilled, semi-skilled, skilled, highly skilled), by geographical area, or both; arduous conditions such as heat, humidity, hazardous processes or underground work may be added |
| s.7(1)(a) | A rate may consist of a basic rate plus a cost of living allowance adjusted at intervals to follow the cost of living index |
| s.8(4) | Rates are to be reviewed or revised ordinarily at intervals not exceeding five years |
| s.9 | The Central Government fixes a floor wage; State minimum wages cannot be set below it, and a State rate already above it cannot be reduced |
| s.69(2) | Notifications made under the repealed Minimum Wages Act 1948 stay in force, so far as they are not contrary to the Code, until they are repealed under it |
Section 69(2) is why nothing changed on the pay slip on the day the Codes came into force. Tamil Nadu's orders fixing minimum wages for each scheduled employment were made under the 1948 Act, and they carry on under the Code until the State replaces them.
The two parts of a Tamil Nadu minimum wage
The basic rate comes from a Labour and Employment Department order for the particular scheduled employment, and it is split by zone and by skill category. The dearness allowance is added on top, and it is the part that moves every year.
The allowance is worked out by a simple formula, visible in the Commissioner of Labour's annual statement. Each employment's order fixes a base index and a rate per point. The Commissioner takes the average consumer price index for Chennai city over the previous calendar year, subtracts the base index, and multiplies by the rate per point. The statement dated 26 February 2024, for allowances payable from 1 April 2024, put the 2023 average at 338 points on the 2001=100 series. With a base of 161, every employment in that statement received 177 points.
| Scheduled employment (2024 statement) | Rate per point | Dearness allowance from 1 April 2024 |
|---|---|---|
| Aerated water manufactory | ₹31.00 a month | ₹5,487 a month |
| Agarbathy manufactory | ₹35.43 a month | ₹6,271 a month |
| Bleaching or dyeing or both | ₹39.65 a month | ₹7,018 a month |
| Automobile workshop | ₹45.40 a month | ₹8,036 a month |
| Auto rickshaws and taxis | ₹71.40 a month | ₹12,638 a month |
| Bakeries and biscuits manufactory | ₹1.40 a day | ₹247.80 a day |
Which rate applies to a contract crew, and what underpaying costs
The contractor pays it, at the rate for the employment the work falls under, and the site is liable if it does not. The Code's definition of employee in section 2(k) covers any person employed on wages by an establishment, other than an apprentice, and a contract worker is the contractor's employee. Where a contractor fails to pay wages due, or pays short, section 55(3) of the OSH Code 2020 makes the principal employer liable to pay the balance in full and recover it from the contractor.
Which schedule a contract crew's work falls under is usually obvious and occasionally not. A crew loading a warehouse attached to an engineering unit, or a housekeeping team inside a factory, could be read against more than one order. Where that is genuinely unclear, the site's own counsel should decide it before the first pay run, because the answer sets the rate per point for the whole crew.
- Claims run for three years. An employee, a registered trade union or the Inspector-cum-Facilitator can bring a claim for wages due, within three years of the claim arising, and later on sufficient cause (s.45(4) and (6)). A single application can cover any number of employees in the establishment (s.45(5)).
- Paying less than the minimum is an offence. The fine is up to ₹50,000 (s.54(1)(a)); a repeat within five years can draw up to three months' imprisonment or a fine up to ₹1 lakh, or both (s.54(1)(b)).
- The minimum is a floor, not the answer on parity. A contract worker doing the same work as a permanent employee may be entitled to more than the notified minimum; the post on same work, same wage on this site covers that separately.
What changes on 1 April each year
The allowance, every year, from the Commissioner's February statement. The 2024 statement was dated 26 February and took effect on 1 April, using the whole of 2023's price index. For the year from 1 April 2026, a notice dated 18 February 2026 is reported to have used a 2025 average of 344 points [VERIFY: the 2026 notice was not found on labour.tn.gov.in; the reference and the 344-point average come from secondary reports, though they are consistent with the published formula].
The basic rate moves less often, when the State revises the order for an employment. Section 8(4) sets the ordinary interval at no more than five years, and several of the orders in the 2024 statement dated from 2019, which puts them at or past that interval. A revised order can also change the base index or the rate per point, which is why an employer should read the order and not only the annual allowance figure.
- Identify the scheduled employment, and the order number, for each role and each contract crew.
- Record the zone and skill category that sets the basic rate.
- Each February, take the Commissioner's statement and reprice the allowance from 1 April.
- Check whether the employment's order has been revised since the last pay run, since a revision can change the basic, the base index or the rate per point.
- Reconcile the contractor's wage register against the rate: the site carries the shortfall under section 55(3) if the contractor gets it wrong.
The floor wage that is not there yet
Section 9 lets the Centre fix a national floor wage, and none has been fixed. The Code has been in force since 21 November 2025, but the Ministry began its consultation with the States on a first statutory floor wage only in mid-2026, as reported by Business Standard in July 2026. Until one is notified, Tamil Nadu's rates stand on their own. When it is, any Tamil Nadu rate below the floor has to rise to it, and any rate already above it cannot be cut down to it.
What that means for a site in practice is narrow. The floor wage will not replace the Tamil Nadu order for an employment; it will set a minimum beneath it. The orders, the annual allowance and the zone and skill categories remain the working numbers for the foreseeable future.
How Velura Services helps
We apply the correct Tamil Nadu schedule for your industry, zone and skill level, and update the dearness allowance each April when it resets. Every rate change shows on our wage slips and in the monthly report you receive, so the site can see what was paid against what was due.
Sources
- The Code on Wages, 2019 (Act 29 of 2019), Gazette text hosted by the Ministry of Labour and Employment — s.2(k) (employee), s.5 (payment of minimum wage), s.6 (fixation by skill and area), s.7 (basic rate and cost of living allowance), s.8(4) (revision within five years), s.9 (floor wage), s.45 (claims, three-year limit), s.54 (penalties), s.69 (repeal of the Minimum Wages Act 1948 and savings). Opened and read.
- Office of the Commissioner of Labour, Chennai, No. Z3/5476/2024 dated 26 February 2024 — statement of dearness allowance payable from 1 April 2024 on the average Chennai consumer price index for 2023 (338 points, 2001=100), with the base index, rate per point and allowance for each scheduled employment. Opened and read from the scanned pages.
- Occupational Safety, Health and Working Conditions Code, 2020, s.55 — contractor's responsibility for wages, and the principal employer's liability under s.55(3) where the contractor fails to pay. Opened and read.
- Ministry of Labour and Employment, Additional FAQs on Labour Codes (as on 16 March 2026) — minimum wages as the statutory wage fixed by the appropriate government, below which an employer is prohibited from paying. Opened and read.
- Commissioner of Labour notice reported as No. Z3/3459/2026 dated 18 February 2026, dearness allowance from 1 April 2026 on a 2025 average of 344 points [VERIFY: not located on the Labour Department's site; from secondary reports]
- Business Standard, July 2026 — start of the Centre's consultation on a statutory floor wage under s.9. Used for date and framing only.