Madhu.T.K
Industrial Relations And Labour Laws
Saswatabanerjee
Partner - Risk Management
Srinivas Nednurkar
Hr Operations
Raj Kumar Hansdah
Shrm, Od, Hrd, Pms
Rdsyadav
Educator, Management Consultant & Trainer
Nanjegowda
Passionate Hr Professional
Rreddygk
Statutory Compliance
Jayjadhav
Hr Assistant
Ojahmriganka
Human Resource
+6 Others

Thread Started by #Nanjegowda

Dear Dignitaries, Bonus ceiling limit amended (Basic Wages) from 10,000 Rs to 21,000 Rs . Please refer here with enclosed Gazette notification for the same. With regards, Nanjegowda 9945282846
4th January 2016 From India, Bangalore

Attached Images
Membership is required for download. Create An Account First
File Type: jpg Amendment to Payment of Bonus Act 2015.jpg (207.6 KB, 3139 views)

HI, i am pursuing mba hr. my interest area is HR & Administration. Therefore which other courses are necessary for improve the importance of my career as HR
4th January 2016 From India, undefined
Is there a second page to the attachment ? There is a reference to a proviso / explanation at the end of the section ....
4th January 2016 From India, Mumbai
Dear Leader’s , Attached full version of Bonus notification for your reference.
5th January 2016 From India, Bangalore

Attached Files
Membership is required for download. Create An Account First
File Type: pdf Payment of Bonus (Amendment) Act 2015.pdf (83.6 KB, 1589 views)

Dear Sir,
Thank you so much. I have doubt in the notification.
My client company pays the maximum bonus of 20%. on Rs. 3500 per month. Now after the amendment my client is liable to pay 8.33% on Rs. 7000 per month. Now my doubt is whether my client has to make any payment or would it suffice if the bonus amount already paid is minimum of 8.33%.
Mukundh
Advocate, 9840503630
5th January 2016 From India, Chennai
Mukund,
There is some confusion here.
Two things have changed :
1. Eligibility for bonus was those who had salary up to ₹10,000 per month, now it's for all those with salary of up to ₹21,000 per month.
2. Bonus was computed on salary of up to ₹3,500 per month, now it is computed on ₹7000 per month.
So, if your company was paying 20% of 3500 x 12, now it will have to pay 20% of 7000 x 12. The bonus rate is subject to availability of enough profit (eligible surplus)
6th January 2016 From India, Mumbai
There are two concepts in the bonus act namely 'allocable surplus' and 'available surplus'. There is a method provided by the act to work out these surpluses also. the bonus is to be paid at that rate (% of salary) as is warranted by the allocable surplus and carry forward thereof.
In case of lack of allocable surplus, you will have to pay minimum bonus of 8.33%.
You will have to study the act or take guidance from someone (accountant / auditors etc)
6th January 2016 From India, Pune
Dear Advocatemukundh
There should not be any confusion.
If you have declared that you are going to pay your employees 20% bonus, i.e. maximum bonus admissible; then obviously you have to pay them DOUBLE the amount. (less that paid already).
In case you have not declared anything in percentage terms, but just an amount; in that case, you have already paid more than the New minimum statutory requirement.
It totally depends on HOW the agreement WAS WORDED.
As a lawyer, you must be aware of the importance of the Wordings & terms used in any legal document.
Warm regards.
6th January 2016 From India, Delhi
as per my knowledge to see the notification Bonus is calculated on minimum wage of the sate or 7000 which is higher.
but some people are confusing and I am not convinced with them for that I want to clear some query
1. suppose 2014 haryana minimum wage was 5348 then how bonus calculated either on 5348 or 7000
2. suppose 2014 delhi minimum wage was 8903 then how bonus calculated either on 8903 or 7000
I need expert advise.
6th January 2016 From India, Mumbai
Dear Mr Mukund, Already your company has paid 20% bonus and if still surplus calculated as per provision under the Payment of Bonus Act, is available, you need to make payment of bonus, the differential amount only. It may be come out 8.33 % then fine, nothing is payable but if as per calculation, if amount is still available for Bonus then actual percentage .I want to emphasize that you paid 20%, the same rate is not mandate.
Regds,
RDS Yadav
Labour Law Adviser
6th January 2016 From India, Delhi
1-In haryana, the bonus will be caluclated on actuals or 7000 whichever is lower 2-In delhi, the bonus will be calculated on 8903
6th January 2016 From India, Valsad
it is 7000 or Minimum wages(as on financial year close date i.e.March 31st 2014/105) which ever is higher. If companies has multiple locations Bonus varies for each location employee.
Regards,
Keshav Reddy.
7th January 2016 From India, Bangalore
dear experts please advise. BHAGWATI PRASAD JAMLOKI HR OFFICER
7th January 2016 From India, Mumbai
Clarify what ? I think all the points raised have been clearly and specifically replied by various members. Quoted : dear experts please advise. BHAGWATI PRASAD JAMLOKI HR OFFICER
8th January 2016 From India, Mumbai
What will be the last date for paying Bonus for the FY 2014-15? since last date i.e November 2015 has already passed. has any rules or notification have been framed by the Ministry regarding it.
8th January 2016 From India, Valsad
You will need to pay it in arrears in the next payroll you process. No rules are framed, but they will allow reasonable time to pay the arrears. I think max 2 months would be allowed.
10th January 2016 From India, Mumbai
I suggest you recalculate the % of bonus payable by your company as per bonus act, in terms of your 'allocable surplus' and the provisions of bonus act. Based on this percentage you arrive at the bonus that should have been paid by you correctly in terms of revised bonus act provisions. From this you minus the bonus already paid. Shortfall if any, will have to be made good by you.
11th January 2016 From India, Pune
#Anonymous
Since wages limit for bonus is now Rs.21,000, and wages includes only Basic + VDA, many Software Engineers will also be eligible for bonus. The bonus is now payable on minimum wages for the scheduled employment or Rs.7,000, whichever is higher, so I would like to know the minimum wages for Software Engineers in Karnataka. In the Karnataka minimum wages for Shops and Commercial Establishments (see attachment), the class of employment closest to "Software Engineer" that I found that is "Computer Operator". Is that the correct class of employment to use to determine minimum wages for Software Engineers? Thanks for your guidance.
13th January 2016 From India, Delhi

Attached Files
Membership is required for download. Create An Account First
File Type: pdf Minimum wage Shops and Com. 2014-15.pdf (1.08 MB, 57 views)

I do not think software development is in a scheduled employment. So the residual category will be shop and establishment (offices) and software engineers will be skilled or highly skilled.
14th January 2016 From India, Mumbai
#Anonymous
Thank you for your reply and valuable opinion. In Karnataka minimum wages for Shops and Commercial Establishments, there is no category for Skilled and Highly Skilled. As shown in the attachment to my earlier message, the Class of employment is categorised from Group I to Group V and then Office Staff. So for the purpose of minimum wages for Software Engineers, I am wondering if Group IV - General Workers (item 9) will apply or if Office Staff - Computer Operator (item 5) will apply. Any guidance would be appreciated.
14th January 2016 From India, Delhi
Dear BP In the 1sr scenario, Bonus will be calculated on 7000/- & in the 2nd scenario, it will remain on 8903/-.
14th January 2016 From India, Mumbai
#Anonymous
It is my understanding that according to the amendment, Maximum earned wages on which bonus is payable is Rs.7,000/- or Minimum wages, whichever is higher. Since bonus is paid on the earned wages, if earned wages is less than the Rs.7,000 the bonus is payable only on the earned wages.
Below are a few examples.
Scenario 1:
Minimum wages: Rs.5348
Earned wages: Rs.5348
Then bonus will be calculated on Rs.5348
Scenario 2:
Minimum wages: Rs.5348
Earned wages: Rs.6800
Then bonus will be calculated on Rs.6800
Scenario 3:
Minimum wages: Rs.5348
Earned wages: Rs.7200
Then bonus will be calculated on Rs.7000
Scenario 4:
Minimum wages: Rs.7500
Earned wages: Rs.7500
Then bonus will be calculated on Rs.7500
Scenario 5:
Minimum wages: Rs.7500
Earned wages: Rs.12000
Then bonus will be calculated on Rs.7500
In case you feel this is wrong, please let me know why.
Thanks.
15th January 2016 From India, Delhi
In the scenario 1 and 2 according to the act we have to calculate the earned wages or the ceiling amount of Rs.7,000/- ‘‘seven thousand rupees or the minimum wage for the
scheduled employment, as fixed by the appropriate Government, whichever is higher"
Reply pls
Regards
Shiva - 9241729276
16th January 2016 From India, Bangalore
संशोधित बोनस भुगतान अधिनियम २०१५ के अंतर्गत -

०१. यह अधिनियम संशोधित बोनस भुगतान अधिनियम २०१५ कहा जायेगा !

०२. यह ०१ अप्रैल २०१४ से प्रभावी होगा !

०३. बोनस भुगतान अधिनियम १९६५ के अनुच्छेद ०२ के परिछेद १३ में जहाँ पर रुपये १०,०००.०० है रुपये २१,०००.०० समझे जाएं !

०४. मुख्य अधिनियम के अनुच्छेद १२ में-

(क) शब्द ३५०० जहाँ - जहाँ पर है वहां वहां पर शब्द ७००० या उचित सरकार द्वारा अनुसूचित नियोजन का जो न्यूनतम वेतन है , जो भी अधिक हो समझा जायेगा !

(ख) अनुसूचित नियोजन का आशय न्यूनतम वेतन अधिनियम १९४८ के अनुच्छेद २ के परिच्छेद (g) से है !

अतः जहाँ तक मैं समझता हूँ तो किसी भी कर्मचारी को बोनस का भुगतान न्यूनतम ७०००.०० की दर से किया जायेगा और यदि कोई कर्मचारी न्यूनतम वेतन से जयदा वेतन पा रहा है तो उसको उसके नियोजन में लागू होने वाले न्यूनतम वेतन की दर से बोनस का भुगतान किया जायेगा ! ऐसे में कर्मचारी का वर्गीकरण देखना होगा की कर्मचारी किस वर्ग में आता है अर्थात अकुशल, अर्धकुशल या कुशल !

जो भी कर्मचारी जिनका वेतन न्यूनतम वेतन के अंतरगत किया जाता है उनका तो बोनस भुगतान उनको दिए जा रहे न्यूनतम वेतन की दर या रुपये ७००० जो भी ज्यादा होगा की दर से भुगतान किया जायेगा ! परन्तु जो कर्मचारी न्यूनतम वेतन की दर से ज्यादा वेतन पा रहे हैं तो उनको भी उनके कार्य की श्रेणी के हिसाब से लागू होने वाले न्यूनतम वेतन की दर से बोनस का भुगतान किया जायेगा !

समस्त उच्च वरिष्ठ लोगों से उनकी राय वांछित है !
16th January 2016 From India, Rudarpur
#Anonymous
Dear Mr. Shiva,
It is my understanding that Bonus is payable on earned wages. The higher of Rs.7000 or minimum wages is just the maximum earned wages on which bonus is payable, that is NOT the minimum amount on which bonus is payable. Hence if earned wages is less than Rs.7,000 the bonus is payable only on the earned wages.
To put it in the form of a fomula in Excel, here is how I would represent this:
=MIN(EarnedWagesForTheMonth, MAX(MinimumWages,7000))
19th January 2016 From India, Delhi
I do not find any sense in the amendment. First, the concept of Rs 7000 or minimum wages whichever is HIGHER, is wrong. To take an example, if the earned wage is Rs 7500 and the minimum wages fixed is Rs 8000, then we have to calculate the bonus on Rs 8000 as we are bound to take minimum wages for calculation of bonus. If, on the other hand, the earned wage is Rs 6800 and the minimum wages is Rs 6500, then we will have to calculate the bonus on Rs 7000, whereas the actual earned wages is only 6800. This is because the bonus is to be calculated on 7000 or minimum wages whichever is higher and in this case 7000 is higher than the minimum wages and hence we take it as base for calculation of bonus. But how can we pay bonus at the rate of 7000 when we are paying only less than that (ie, Rs 6800) or when we are bound to pay only less than that, ie, Rs 6500, the minimum wages?

Now the amendment suggests a retrospective effect to the new system. Needless to say that a Bonus decision is taken after a lengthy processes involving trade unions and spending a lot of time in negotiations. It is horrible to reopen everything and re do it. Now let us analyse the apprehension of Advocatemukundh, that if he has been paying at the rate of 20% on 3500, whether he would have to retain the percentage of 20% and based on it pay bonus at 20% of 7000 or can have a percentage lesser than 20%. This should be addresses now because rate percentage of bonus is decided after considering allocable surplus and it will be different at different amounts allocated for payment of bonus. When a smaller amount is allocated for payment of bonus, the remaining amount of profit will be readily available for distribution as bonus and the same will be repeated over years. But when it is calculated on 7000, more amounts would be required for payment of bonus and this would certainly reduce the profits available and the rate of bonus for the coming years.

That means, the entire process will have to be reopened and the rate of bonus based on 7000 or minimum wages whichever is higher will have to be decided considering the allocable and available surpluses. In such cases, where the trade unions were involved, I do not think that this would be an easy task. Therefore, I feel that the amendment lacks sanctity. It is good that more people are brought under the bonus cover and it is also good that the amount of bonus would also be good. But the inclusion of “whichever is high” and its retrospective effect should be reconsidered.

Madhu.T.K
19th January 2016 From India, Kannur
#Anonymous
Dear Mr. Madhu,
In your post above, you mention "If, on the other hand, the earned wage is Rs 6800 and the minimum wages is Rs 6500, then we will have to calculate the bonus on Rs 7000, whereas the actual earned wages is only 6800". My understanding is different from this. According to the (amended) Act, section 12 will be something like this:
Where the salary or wage of an employee exceeds seven thousand rupees or the minimum wage whichever is higher per mensem, the bonus payable to such employee under section 10 or, as the case may be, under section 11, shall be calculated as if his salary or wage were seven thousand rupees or the minimum wage whichever is higher per mensem.
Please observe that it says "WHERE the salary or wage of an employee EXCEEDS". So if the salary/wages is lesser than the maximum limit (higher of 7000 or minimum wage), only actual wages should be taken. So in this case on 6800.
In case there is anything wrong in this interpretation, please let me know.
19th January 2016 From India, Delhi
Yes, you are right. In the case of employees whose wages is less than Rs 7000, the actual wage will be the base for calculation. Let us write the new section 12 as follows for the sake of understanding how it works.
Section 12: Calculation of bonus with respect to certain employees.- Where the salary or wage of an employee exceeds seven thousand rupees or the minimum wage for the scheduled employment, as fixed by the appropriate Government, whichever is higher per mensem, the bonus payable to such employee under section 10 or, as the case may be, under section 11, shall be calculated as if his salary or wage were seven thousand rupees or the minimum wage for the scheduled employment, as fixed by the appropriate Government, whichever is higher per mensem.
Madhu.T.K
19th January 2016 From India, Kannur
#Anonymous
OK since that is clear now, I would like to go back to my earlier question on this thread which is still unresolved.

Since wages limit for bonus is now Rs.21,000, and wages includes only Basic + VDA, many Software Engineers will also be eligible for bonus. The bonus is now payable on minimum wages for the scheduled employment or Rs.7,000, whichever is higher, so I would like to know the minimum wages for Software Engineers in Karnataka.

Mr. Saswata Banerjee said "I do not think software development is in a scheduled employment. So the residual category will be shop and establishment (offices) and software engineers will be skilled or highly skilled."

But in Karnataka minimum wages for Shops and Commercial Establishments (see attached) there is no category for Skilled and Highly Skilled, the Class of employment is categorised from Group I to Group V and then Office Staff. So for the purpose of minimum wages for Software Engineers, I am wondering if Group IV - General Workers (item 9) will apply or if Office Staff - Computer Operator (item 5).

Any guidance on this would be appreciated.
19th January 2016 From India, Delhi

Attached Files
Membership is required for download. Create An Account First
File Type: pdf Minimum wage Shops and Com. 2014-15.pdf (1.08 MB, 30 views)

The attachment pertains to shops and commercial establishments and spinning mills. But in most of the states,like kerala, separate minimum wages notification has been issued for IT and iTES industries. That means IT is a scheduled employment. If no separate minimum wages is fixed for IT companies, then the applicability of 21000 and 7000 are still there for them. If the software Engineers are getting Basic (+DA) pay of less than 21000, obviously, they would come under the bonus bracket. In the past also, small IT companies have been working out Bonus as per 10000 ceiling.
Madhu.T.K
19th January 2016 From India, Kannur
I think the closest term is computer operator, not general worker.
I would suggest you refer the matter to the GLC for a clarification.
Makes no sense to get into trouble for a minor amount.
Also remember there are separate limits for managers, who will therefore get a higher bonus
20th January 2016 From India, Mumbai
In the absence of any statutory minimum wages, the maximum salalry for calculation of bonus would be Rs 7000. Madhu.T.K
20th January 2016 From India, Kannur
Madhu,
This is not absence of minimum wages.
The minimum wages is defined in this case under the residual category.
In Karnataka (as with most other states) if you are not in specified category, you are in factory General workers or in shop and establishment.
There is no escape from minimum wages actually.
What is not covered in the end is domestic services, and probably those working in corporate guest houses.
21st January 2016 From India, Mumbai
Please note that as per the Payment of Bonus (Amendment) Act 2015
1. If the minimum wage is 5000 in that case the bonus to be calculated on 7000/
2. If the Minimum wage is 7500 in that case it will be calculated on 7500/ not on 7000/
However, it will differ state to state and skill to skill as per the minimum wage notifications
14th March 2016 From India, Mumbai
If the minimum wages is Rs 5000 and the wages that you pay is also the same, Rs 5000, why should you calculated bonus on Rs 7000? You can pay it based on 5000. The matter of minimum wages comes only when the wages is more than 7000.
Madhu.T.K
15th March 2016 From India, Kannur
Hi, Dear all members ,
it is binding on employer to contribute in PF account same amount as per employee share then how it is possible that total amount of my PF deduction shows me only Rs.558 as my PF share is Deducted 450 every month from salary. and please inform me about Minimum wages act 1948 rules and they are not following rules.please guide me and reply on jayjadhav77@gmail.com
regards,
sanjay jadhav
15th March 2016 From India, New%20Delhi
Dear All ,
Kindly inform me about what is the criteria can be used for increments of employee our poultry industry increase only 500 to 1500 Rs. yearly of employee. please guide me.and reply to jayjadhav77@gmail.com
15th March 2016 From India, New%20Delhi
Use separate threads for opening the new discussions. The above two posts are not related to this topic. Please follow the rules. Madhu.T.K
15th March 2016 From India, Kannur
Please note there is also a stay order on on payment of bonus act from Tamil Nadu high court, Parliament has not considered the payment of wages act for revising the Bonus Act.
16th March 2016 From India, Hyderabad
Actually, there is an interesting view I have got from some senior lawyers on the stay order.
Since the stay order is concerning the constitutional validity of an act, the stay order applies not only in the state of Tamil Nadu, but to the operation of that section of the act in the whole country.
17th March 2016 From India, Mumbai
yes, i read the same about the amendments online in other articles and as per CA Hitesh ( <link no longer exists - removed> ), the limit for coverage of employee and limit for calculation of bonus has been increased under the act. But i am still confused about from when these amendments are implemented? Is it retrospectively or from 2015/16?
14th May 2016 From India, New Delhi
Retrospective implementation has been stayed by the high courts.
Therefore at the moment, pay higher bonus for current year
Once the court decides on retrospective implementation, you need to act accordingly
15th May 2016 From India, Mumbai
Minimum wages are for 26 days while for calculating Statutory Bonus (as Payment of bonus Act) I think we are required to do calculations on 30 days per month. So does this mean that I take the monthly minimum wage as per the latest notification of my state and divide by 26 and multiply by 30 to arrive at the minimum wage that should be used for Bonus calculation?
29th August 2016
Bonus is computed not based in 39 days but based in a % of salary cap earned for the previous year So the computation of 26 days and 30 days does not matter
30th August 2016 From India, Mumbai
In that case Banerjee ji, will you please show me the calculation of Bonus for a person (software developer) earning Rs 19,000/- of Basic Salary per month in Rajasthan where the minimum wage as of today is Rs 271/- per day or Rs 7046 per month for highly skilled category. These minimum wages are being quoted from the notification of Rajasthan Govt. I have not performed any calculation here.
For more info you can see the notification on http://labour.rajasthan.gov.in/Notification.aspx
The last item on this page (point 25 has the notification in hindi) go to page 11 of 12 of this notification to see the minimum wages of a highly skilled worker.
As you can see Rs 7046 is actually Rs 271 * 26 days.
Thanks..awaiting your reply.
31st August 2016
Forgot to mention...the bonus has to be calculated on 20% in case of our company so please do you calculation on 20%. Will it be 20% of Rs 7046 or 20% of Rs 7000 or 20% of 8130 (which is 7046*30/26) or will it be 20% of 8401 (7046*31/26 if the month has 31 days).
31st August 2016
Reply (Add What You Know) Start New Discussion

Cite.Co - is a repository of information and resources for business and professional growth. Register Here
Prime Sponsor: TALENTEDGE - Certification Courses from top institutes like IIM / XLRI direct to device (online digital learning)





About Us Advertise Contact Us
Privacy Policy Disclaimer Terms Of Service



All rights reserved @ 2017 Cite.Co™