Is Your Software Team Eligible for the Latest Bonus Act Update? Let's Discuss!

Dear Sir/Madam,

From which date is the recent update on the Payment of Bonus Act applicable? Also, I would like to know if employees working in the software industry with a monthly basic salary below Rs. 10,000 are eligible for the said bonus.

Regards,
Mahesh Hyam

On 27th October 2007, the President promulgated the Payment of Bonus (Amendment) Ordinance, 2007 containing the following amendments:

i) Amendment to clause (13) of Section 2 of the Payment of Bonus Act, 1965 to raise the eligibility limit for payment of bonus from the salary or wage of Rs. 3500/- per month to Rs. 10000/- per month.

ii) Amendment to Section 12 of the Payment of Bonus Act, 1965 to raise the ceiling for calculation purposes from the salary or wage of Rs. 2500/- per month to Rs. 3500/- per month;

iii) Deletion of clause (vi) of Section 32 of the Payment of Bonus Act, 1965 so as to cover the employees employed through contractors on building operations.

Thus, the employees, including those employed through contractors on building operations, will be entitled to receive bonuses as per the revised ceilings for the year 2006-07 and onwards.

The Ordinance shall be deemed to have come into force on 1st April 2006.

Ministry of Labour & Employment, New Delhi, Kartika 07, 1929/October 29, 2007

VBA:NR:LK:29/10/07