How Does the Bonus Increase to Rs 7,000 Impact You Starting April 2015?

Minimum bonus to be hiked to Rs 7,000 a year. This is good news for all the employees that the bonus will increase from 3500 to 7000 starting from 01.04.2015.

Minimum Bonus to be Hiked to Rs 7,000 a Year

Several lakhs of workers in the organised sector will benefit as the Cabinet on Wednesday approved a proposal to raise the salary threshold for mandatory bonuses for workers from Rs 10,000 a month at present to Rs 21,000, and the minimum bonus from an annual Rs 3,500 now to Rs 7,000.

All factories and establishments employing 20 or more persons are expected to pay the bonus compulsorily, provided the worker has worked in the establishment for at least 30 days. Employees in Life Insurance Corporation, sailors, dock workers, and university employees are outside the Act’s ambit.

The Payment of Bonus (Amendment) Bill, 2015 will be tabled in Parliament for this purpose. The new bonus norms will take effect retrospectively from April 1, 2015.

While the minimum bonus is a legal liability on the firms concerned, whether or not they make a profit, these firms are also required to pay the workers a higher bonus if their “allocable surplus” exceeds the amount payable as a minimum bonus, subject to a cap (20%) of the salaries.

The salary ceiling for mandatory bonus eligibility was last fixed in 2007 and made effective retrospectively from April 1, 2006. While industry associations demanded exempting sick units from the requirement of paying bonuses, trade unions have pitched for the removal of the ceilings as “profits are not capped,” official sources said.

Dear sir,

Greetings for the day.

As heard from the news, it is a good update, but it will be effective from 01/04/2015 onwards. The circular and gazette on this matter are awaited.

Thanks & Regards,

From,

Sumit Kumar Saxena

It's a good initiative, since $3500 has been a very small amount to be paid as a bonus, if this is applicable soon.

Minimum Bonus to be Hiked to Rs 7,000 a Year

By FE Bureau | The Financial Express – Thu 22 Oct, 2015 4:16 AM IST

Several lakhs of workers in the organised sector will benefit as the Cabinet on Wednesday approved a proposal to raise the salary threshold for mandatory bonuses for workers from Rs 10,000 a month at present to Rs 21,000 and the minimum bonus from an annual Rs 3,500 now to Rs 7,000.

All factories and establishments employing 20 or more persons are expected to pay the bonus compulsorily, provided the worker has worked in the establishment for at least 30 days. Employees in Life Insurance Corporation, sailors, dock workers, and university employees are outside the Act’s ambit.

The Payment of Bonus (Amendment) Bill, 2015 will be tabled in Parliament for this purpose. The new bonus norms will take effect retrospectively from April 1, 2015.

While the minimum bonus is a legal liability on the firms concerned, whether or not they make a profit, these firms are also required to pay the workers a higher bonus if their “allocable surplus” exceeds the amount payable as a minimum bonus, subject to a cap (20%) of the salaries.

The salary ceiling for mandatory bonus eligibility was last fixed in 2007 and made effective retrospectively from April 1, 2006. While industry associations demanded exempting sick units from the requirement of paying bonuses, trade unions have pitched for the removal of the ceilings as “profits are not capped,” official sources said.