Friends, please find attached the Payment of Bonus (Amendment) Bill 2015 introduced in Lok Sabha on 7.12.2015 to amend the Payment of Bonus Act 1965. The Act provides for the annual payment of bonuses to employees of certain establishments (including factories and establishments employing 20 or more persons). Under the Act, the bonus is calculated based on the employee’s salary and the profits of the establishment.
Employees eligible for bonus: The Act mandates the payment of bonuses to employees whose salary or wage is up to Rs 10,000 per month. The Bill seeks to increase this eligibility limit to Rs 21,000 per month.
Calculation of bonus: The Act provides that the bonus payable to an employee will be in proportion to his or her salary or wage. However, if an employee’s salary is more than Rs 3,500 per month, for the purposes of bonus calculation, the salary will be assumed to be Rs 3,500 per month. The Bill seeks to raise this calculation ceiling to Rs 7,000 per month or the minimum wage notified for the employment under the Minimum Wages Act, 1948 (whichever is higher).
Prior publication of rules: The Act provides that the central government may make rules to implement its provisions. The Bill seeks to mandate the prior publication of such rules in the Official Gazette to allow for more public consultation.
Retrospective effect: The Bill will come into force on April 1, 2015.
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Employees eligible for bonus: The Act mandates the payment of bonuses to employees whose salary or wage is up to Rs 10,000 per month. The Bill seeks to increase this eligibility limit to Rs 21,000 per month.
Calculation of bonus: The Act provides that the bonus payable to an employee will be in proportion to his or her salary or wage. However, if an employee’s salary is more than Rs 3,500 per month, for the purposes of bonus calculation, the salary will be assumed to be Rs 3,500 per month. The Bill seeks to raise this calculation ceiling to Rs 7,000 per month or the minimum wage notified for the employment under the Minimum Wages Act, 1948 (whichever is higher).
Prior publication of rules: The Act provides that the central government may make rules to implement its provisions. The Bill seeks to mandate the prior publication of such rules in the Official Gazette to allow for more public consultation.
Retrospective effect: The Bill will come into force on April 1, 2015.
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