Wages have been classified into three categories:

Wages have been classified into three categories:

(1) Living wages

(2) Minimum wages

(3) Fair wages

(1)         Living Wages Definition is given by Justice Higgins which reads "Living wage is a wage sufficient to ensure the workman food, shelter, clothing, frugal comfort, provision for evil days etc. as regard for the skill of an artisan, if he is one". According to Fair Wages Committee Report: "The living wage should enable the male earner to provide himself and his family not merely the basic essentials of food, clothing and shelter but a measure of frugal comfort including education for the children, protection against ill-health, requirement of essential social needs and measures of insurance against old age."  

(2)          Minimum Wages—The minimum wage may be defined as the lowest wage necessary to maintain a worker and his family at the minimum level of subsistence, which includes food, clothing and shelter. When the government fixes minimum wage in a particular trade, the main objective is not to control or determine wages in general but to prevent the employment of workers at a wage below an amount necessary to maintain the worker at the minimum level of subsistence.The Government of India passed a Minimum Wage Act in 1948.

(3) Fair Wages—A fair wage is something more than the minimum wages. Fair wage is a mean between the living wage and the minimum wage. While the lower limit of the fair wage must obviously be the minimum wage, the upper limit is the capacity of the industry to pay fair wage compares reasonably with the average payment of similar task in other trades or occupations requiring the same amount of ability. 

The fair wages depends upon the following factors :

(1) Minimum Wages

(2) Capacity of the industry to pay

(3) Prevailing rates of wages in the same or similar occupations in the same or neighboring localities

(4) Productivity of labour

(5) Level of national income and its distribution.

(6) The place of the industry in the economy of the country.

In my opinion we follow the Minimum wages prescribed by the respective State Government's for the respective schedule of employment. 

A schedule of employment is the category of industry (Hotel, Plastics, Construction, Bakery......).  The Min.wage generally has 2 components, the basic wage + Dearness Allowance which is linked to the cost of living index considering a base year (1960, 1982, 2001......) & we have region wise indices too.