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How India’s move to reduce minimum referral wages could hurt its workers in the Gulf

BUY-SELL | HELP WANTED | MATRIMONIAL

Indian migrant workers, hit by the pandemic-led downturn, are confronted with a new challenge – a reduction in the mandated by the government to protect them from exploitative employers abroad. Minimum referral wages apply to poorly educated, low skilled blue-collar workers who have to produce an Emigration Check Required passport when they seek to migrate to 18 countries for work.

The countries seeking Emigration Check Required clearance include the Gulf Cooperation Council members and others like Sudan, Indonesia, Malaysia and Jordan. But minimum referral wage is most critical in the Gulf, a favoured destination for Indian migrants, due to the lack of minimum wage systems in these countries.

In September 2020, the overseas employment division of the Ministry of External Affairs issued two circulars fixing the reduced minimum referral wages thus: Bahrain, Oman, Qatar and the United Arab Emirates at $200 per month, Saudi Arabia at $324 and Kuwait at $245 in the case of work-visa holders and $196 for domestic workers. Implemented across all skill levels and occupations, the reduction in minimum referral wage ranged between 30% and 50%.

The government reasoned that this reduction would ensure that Indian workers do not lose out on overseas employment opportunities given the economic conditions due to Covid-19. Indian workers have higher wages than…

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