How Will India's Proposed Bonus Amendments Impact Your Business and Employees?

Dear Friends,

The Government of India, through the Payment of Bonus (Amendment) Bill-2010 (15 of 2010) published in the Gazette of India, proposes the following amendments:

1. To increase the minimum bonus limit from 8.33% to 11%.
2. To raise the wage ceiling of coverable employees from Rs. 10,000 to Rs. 15,000 per month.
3. To enhance the calculation of bonus from Rs. 3,500 to Rs. 5,000 per month.

Currently, the above proposals are in the form of a bill only.

Regards,
Anil Kaushik
Chief Editor, BUSINESS MANAGER
B-138, Ambedkar Nagar, Alwar-301001 (Rajasthan), India
Landline: 0144-2372022
Mobile: 09829133699
Email: bmalwar@yahoo.com

"YOUR TODAY'S PROBLEMS ARE YESTERDAY'S WRONG DECISIONS"

Please reply to the following queries:

1. What is the minimum bonus limit, 8.33%? Is it calculated based on the basic wage or gross wage?

2. How can we enhance the bonus calculation from Rs. 3,500/- to Rs. 5,000/- per month? Please provide clarification on this matter.

Dear Member,

Please go through section 2(21) of the Payment of Bonus Act, 1961 for the definition of wage or salary. In general, we are to consider Basic & DA. However, where an employee is given, in lieu of the whole or part of the salary or wage payable to him, free food allowance or free food by the employer, such food allowance or the value of such food shall, for the purposes of this clause, be deemed to form part of the salary or wage of the employee.

As already clarified by Mr. Anil Kaushik, this is only an amendment bill. Therefore, we should wait for some time.

With Regards,
R.N.Khola

Please reply to the following queries:
1. Is the minimum bonus limit 8.33%? Is it calculated on the basic wage or gross wage?
2. Can you provide clarification on enhancing the calculation of the bonus from Rs. 3500/- to 5000/- per month?

Re: Govt. proposal to increase bonus to 11% - Business Manager - HR Magazine update

Dear Anil,

Good to see the upcoming amendment under the Payment of Bonus Act. Point 1 & 3 are excellent, whereby the percentage of the bonus limit and the calculated amount have to be increased to 11% and Rs. 5000 per month, respectively. However, Point 2, where the wage ceiling of coverable employees increases to Rs. 15000 per month, may not be viable. This is because many organizations currently pay ex-gratia to employees who are not covered under the Payment of Bonus Act, with the ex-gratia amount often exceeding the statutory bonus amount. As a result, employees who were previously not covered under the Act will now be covered, leading to a loss of the ex-gratia amount paid by the organizations.

Regards,

Himanshu Divecha

Ex gratia is not a guarantee; it may either be paid or not paid by organizations. If it is a bonus, it becomes statutory and is payable. Let the people be happy with the proposed new enactment.

Regards,
K. Ramachandra
Bangalore

Dear Sir, Is there any change in the maximum limit of 20%? Kindly inform me and advise where we can find the central government gazettes.

Regards

Re: Govt. proposal to increase bonus to 11% - Business Manager

Friends, the bill is yet to be passed. A copy of the introduced bill is enclosed.

Regards,
chandu1967

Dear All,

As already posted, a bill, when introduced in either of the Houses of Parliament, has to be passed by both Houses. It is then sent for Presidential assent and subsequently notified in the Gazette for it to come into effect. In the meantime, it can be referred to a Parliamentary Select Committee for detailed consideration. The bill must pass through these stages before it is notified, and discussions until then can be considered academic.

With Regards,
Advocates & Notaries & Legal Consultants for Staffing & Recruiting Industry
E-mail: rajanassociates@eth.net
Mobile: 9025792684-9025792634

If this proposal passes, it will take effect from the financial year 2009-10 or 2010-11. If we adopt this proposal, all employees' monthly CTC will be affected.

Regards,
Ravi Dixit

Please note that it was not published in the Government Gazette as posted in this discussion. It is a private member bill, just like any other private member bill filed during the month of March 2010 in parliament. For amendment, it has to travel a long way!

Dear Member,

What percentage of bonus has your employer declared for the accounting year for which you are requesting calculation? What amount is your employer offering to you?

Regards,
R.N. Khola

Dear all,

This is only at a preliminary stage. The government will think ten times before effecting this change as it will first give an additional financial role to their corporations, hence the delay. If it pertains only to private companies, then they will do it immediately without any hesitation.

Thanks,

Thirumalai S
Email: thirumalai@sify.com

Govt. proposal to increase bonus to 11% - Business Manager - HR Magazine update

Dear Friends,

The Government of India, through the Payment of Bonus (Amendment) Bill-2010 (15 of 2010) published in the Gazette of India, proposes the following amendments:

1. To increase the minimum bonus limit from 8.33% to 11%.
2. To increase the wage ceiling of coverable employees from 10000/- to 15000/- per month.
3. To enhance the calculation of bonus from Rs. 3500/- to 5000/- per month.

At present, the above proposals are in the form of a bill only.

Sir, has it been passed?

Thank you for providing valuable advice.

As mentioned earlier, a bill, when introduced in either of the Houses of Parliament, has to be passed by both Houses. It is then sent for Presidential assent and notified in the Gazette for it to come into effect. In the meantime, it can be referred to a Parliamentary Select Committee for detailed consideration. It must go through these stages. Discussions can be academic until it is notified.

With Regards,
VS Rajan Associates,
Advocates & Notaries & Legal Consultants for the Staffing & Recruiting Industry
No.27, 1st Floor, Singapore Plaza,
No.164, Linghi Chetty Street,
Chennai - 600 001.
E-mail: rajanassociates@eth.net,
Office: 044-42620864, 044-65874684,
Mobile: 9025792684-9025792634.

Please let us know if the Bonus Act of 2010 is only a proposal or if it is to be implemented. If implemented, please let us know the date of the act. Kindly clarify so that everyone can benefit from this.

With warm regards,
S.L.G

No amendments have taken place so far, and thus no implementation is to be effected.

Regards,
R N KHOLA

He is eligible for the payment of a bonus for the period of 2010-2011 because he has completed 30 working days after the period of March 2011. This means he has been continuously working from February 27, 2011, until the present date. If he leaves his service on March 31, 2011 (not continuing his service after March 31, 2011), in that case, he is not eligible for bonus payment.

Thank you.