Karnataka High Court Halts Circulars Withholding Revised Minimum Wages

The High Court of Karnataka has stayed, until further orders, a set of government circulars that instructed authorities across the State to withhold salaries payable to outsourced, contract and daily wage employees at the revised minimum wage rates. The revision had taken effect from May 22, 2026.

Justice H.T. Narendra Prasad passed the interim order while hearing separate petitions filed by the All India Trade Union Congress, the Karnataka Rajya Sarkari Khayametharara Noukarara Okkuta, the All India Central Council of Trade Unions and others.

The dispute centres on a circular issued by the Karnataka State Audit and Accounts Department on July 29, which asked various departments to stop paying salaries at the revised minimum wage to outsourced, contract and daily wage categories of employees. Subsequently, the departments of Municipal Administration and Rural Development and Panchayat Raj issued their own circulars on August 10 and August 28, directing local bodies to withhold payment at the revised rates and continue paying the pre-revision salary until further instructions from the government.

The petitioner unions contended that the Audit Department's circular rested on "oral instructions" from the Finance Department, which they argued are wholly without authority of law. They pointed out that salaries at the revised minimum wage had already been paid to these employees for a month before the withholding circulars were issued.

The petitions further state that a notification issued under Section 5 of the Minimum Wages Act, 1948, is subordinate legislation carrying statutory force and cannot be overridden by executive or administrative instructions or circulars. Once a minimum wage is notified, the unions argued, it becomes a vested right of the workmen that cannot be deferred or diluted.

The interim stay remains in force until further orders.