7th Pay Commission Vs 8th Pay Commission: How Minimum Wage Determination; Higher Fitment Factor Demands Are Emphasised

With discussions around the 8th Pay Commission gathering traction, minimum salary and the fitment factor have emerged as the most contentious issues among employees and unions. Staff unions are urging for an approach that will set the minimum pay of employees. Employees and unions are also expecting a greater fitment factor from the 8th Pay Commission. 

Recently, the NC-JCM Staff Side has put forward a proposal, especially on how minimum pay should be calculated. According to the proposal, the following factors should be considered when setting the minimum wage:

Calorie requirements for an adult Food, clothing and other necessities Actual retail prices from government ration shops and cooperative consumer shops Provisions for festivals and social obligations Digital and technological expenses, such as mobile phones, internet and others

The 7th Pay Commission determined the minimum wage using a need-based minimum approach, taking into account the needs of a household consisting of an employee, their spouse and two children under the age of 14.

The minimum wage determination of the 7th Pay Commission did not incorporate expenses like mobile phones, Wi-Fi and internet. The staff side has emphasised the inclusion of digital and technological expenses, such as mobile phones, internet and other everyday technological requirements in the 8th Pay Commission.

During the 7th Central Pay Commission, the fitment factor was set at 2.57 which resulted in a minimum basic pay of Rs 18,000. Employees and unions are expecting a higher fitment factor from the 8th Pay Commission. According to the demand, inflation, household expenses, healthcare and a technology-driven lifestyle have significantly increased expenses. Employees and unions believe that a higher fitment factor can cover up these expenses. 

The 7th Pay Commission officially ends on December 31, 2025. The 8th CPC will come into effect from January 1, 2026. While the 8th Pay Commission has been formally constituted, its recommendations are still in progress. Going by past trends, once the report is submitted, the government usually takes another 3 to 6 months to examine, approve and notify the recommendations. This makes late 2027 or early 2028 a more realistic timeline for implementation.