Thread Started by #gobikannansudhakar

Working in reputed tyre manufacturing based at tamilnadu as senior executive, where bonus being calculated to slap rate Rs. 4800/- with 20% for 2016-17 as per national floor rate, even though we used to calculate the same to ceiling of Rs. 7000/-.
In this place, i could not understand and please clarify that is bonus calculated by national floor level rate or bonus ceiling amount of rs. 7000/-.
Thanks and do the needful.
11th September 2017 From India, Madras
Dear Gobikannansudhakar,
It is imperative that first we should be clear about the difference between the minimum wages fixed under the Minimum Wages Act,1948 and the National Floor Level Minimum Wage (NFLMW) fixed by the Central Government.
Minimum Wages are fixed and periodically revised in respect of the scheduled employments under the Minimum Wages Act,1948 by the respective Appropriate Governments under the Act. Very well we all are aware of the fact that there are many,many employments in the unorganized sector yet to be brought under the schedule of the MW Act,1948 for obvious reasons.Even in the unorganized sector where the fixation and revision of the minimum wages by the appropriate Govts have been in practice, there are considerable differences in the rates.Similarly in organized sectors too where collective bargaining is the method of wage determination, regional differences creating imbalance in the cost of labour are present. In order to have a uniform wage structure and to reduce the disparity in minimum wages prevailing in such unorganized sectors across the country, a concept of National Floor Level Minimum Wage was mooted on the basis of the recommendations of the National Commission on Rural Labor (NCRL) in the year 1991. Taking a positive note of the recommendation of the NCRL in this regard as well as the subsequent rises in the Price Indices, the Central Govt. fixed the NFLMW at Rs.35 per day in 1996. Since then it has been periodically revised and it stands at Rs.160-00 per day w.e.f 01-07-2015, if I remember correct.
Therefore, NLFMW is a non-statutory measure to ensure uniform minimum wages and its upward revision across the nation in respect of employments in unorganized sector which have not yet been not brought under the schedule of the MW Act,1948. As for as organized sector is concerned, NFLMW is only a guideline to the appropriate govts in the matter of fixation of minimum wages under the MW Act,1948.
Hence the calculation of bonus for the year 2016-17 as per the NFLMW is totally wrong even if MWs are not yet fixed under the MW Act for your industry. In addition, your management has to take note of the amendment to sec.12 of the Payment of Bonus Act,1965 which clearly mentions that the calculation should be made as Rs.7000/= or the MW fixed under the MW Act whichever is higher only..
11th September 2017 From India, Salem
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