I have two questions related with “The payment of Bonus Act, 1965”.
As per amendment in 2014, new wages/salary limit is Rs: 21,000/- per month. Those who are getting wages/salary upto 21,000/ are eligible to get bonus. Minimum Bonus wages/salary limit is for the bonus calculation is 7,000 or state schedule minimum wages, whichever is higher.
Now, my question is, if an employee, appointed as operator and getting Rs: 15,000/- per month as salary and the state schedule employment rate for his category is Rs: 11,000/-, then which should be considered for the calculation of Bonus? Weather it should be Rs: 15,000 or 11,000/-.
My second question is, during the payment of full and final, should we include Bonus as a part of Full & Final or not (since, bonus payment percentage is depends on the company profit)?

From India, Varanasi
Dear Rahul,
Please go through the amended section 12 of the PB Act,1965 which clearly states that where the salary or wage of an employee exceeds Rs.7000-00p.m, the bonus payable to such employee u/s 10 or, as the case may be, u/s 11, shall be calculated as if his salary or wage were Rs.7000/=p.m or the minimum wage for the scheduled employment as fixed by the appropriate Govt whichever is higher.
Coming to the case you cited,
since the operator's salary is Rs.15000-00p.m, it exceeds the notional limit fixed u/s 12 of the Act and hence for the purpose of calculation of bonus, it should be treated as Rs.7000-oo only - this is the basic point.
However, since the operator job comes under the scheduled employment of the Minimum Wages Act,1948 and the minimum wages fixed for the job is admittedly Rs.11000-00p.m which is higher than the notional wages of Rs.7000-00, his bonus should be calculated on the basis of Rs.11000/= only.
Bonus is a payment determined on the close of the Accounting Year and paid later to the employee for the services he rendered during the A.Y. If he leaves the organization before declaration and payment of bonus, certainly he has the right to claim it later. Therefore, it becomes the part and parcel of the F&F Settlement due to him on his exit. The employer may indicate that the bonus for the services rendered during the AY prior to the date of his exit would be paid to him later when it is announced and payable.

From India, Salem
Thank you Sir for your guidance
From India, Varanasi
There is one supplementary question as well.
I continue with above mentioned example with modification in salary.
If operator getting salary Rs: 25,000/- per month, where as state schedule rate for operator category is Rs: 11,000/-, then in such case, will he covers under payment of bonus act or not ?
Rahul Sindhwani

From India, Varanasi
Dear Rahul,
Whenever, the salary of the employee exceeds Rs.21000-00 p.m, he ceases to be an "employee" under the Payment of Bonus Act,1965 as per the definition clause of 2(13) of the Act w.e.f the day his/her salary exceeds the limit.

From India, Salem
We are facing issue with this limit. Actually our few employees are demanding Bonus as per their actual salary because we exclude few of them due to high salary (More than Rs:21,000/-). Now, their demand is, if we exclude some of them due to high salary then we should consider rest employees as per their actual salary for Bonus payment. They are saying management is talking double standard in the matter of Bonus Payment.

From India, Varanasi
Dear Rahul,
Elibibility of bonus & calculation of bonus are totally different.
For elibibility of bonus - Those who are getting wages/salary upto 21,000/ are eligible to get bonus.
For calculation of bonus - for the bonus calculation, minimum Bonus wages/salary limit is 7,000 or state schedule minimum wages, whichever is higher.
So for the bonus calculation, you have to go with the minimum wages/salary limit of 7,000 or state schedule minimum wages, whichever is higher, but for the bonus calculation, should not to go with the salary decided for elibibility of bonus, i.e. 21,000/-.

From India, Thane

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