How Will the 2015 Bonus Amendment Impact Your Payroll Calculations?

Payment of Bonus (Amendment) Bill 2015

Please find attached the Payment of Bonus (Amendment) Bill 2015 as passed by the Lok Sabha on 22.12.2015. The Bill provides for the following amendments:

• The eligibility limit for the payment of bonus has been increased from Rs. 10,000 to Rs. 21,000.
• The calculation ceiling has been raised from Rs. 3,500 p.m. to Rs. 7,000 p.m.

According to the official amendment made to the Bill, these amendments have now been made effective retrospectively from 1st April 2014. Therefore, we will need to calculate the differential liability for 2014-15 and make payments accordingly.

Thanks

I appreciate the efforts of Shri P.C. Agrawal for posting the copy of the passed bill for the awareness of one and all. Of course, it is good news for the entire working class that the Payment of Bonus (Amendment) Bill 2015, to increase the Bonus Calculation Ceiling and eligibility ceiling, has been passed in Lok Sabha on 22.12.2015. It is slated to come into force with effect from 1st April 2014.

But management should also be ready to work overtime to meet the double liability from the back date of its effect (2014-15) for the payment of arrears of bonus with effect from 01.04.2014, as soon as it takes the shape of the Act on completion of other necessary formalities.

As per the provisions of the Bonus bill, the Bonus Calculation ceiling is raised from 3500 to 7000 and the eligibility ceiling of wage from 10000 to 21000 per month. Earlier, the Cabinet gave its approval for this Bonus bill and said it would come into effect from 1.4.2015 after being passed in Parliament. However, now, as per the statement of Labour Minister Bandaru Dattatreya, at the intervention of the Prime Minister of India, by moving an official amendment to the Bill, the benefits of this Act are going to be made available from 1st April 2014, instead of 2015.

Regarding the above query, I would like to ask all seniors what I understood from the above amendment. It seems that instead of an 8400/- bonus amount, we now need to pay 16800/- for the bonus. Please correct me if I am wrong.

Dear Agrawal ji,

Thank you for uploading the amended bonus bill by the government. If you could provide the Gazette Notification of the new amended Bonus Act, it would be highly appreciated. (At the earliest, please).

Regards,

PBS KUMAR

Please find attached the Official Gazette notification for the Amendment Act.

Thanks

With The Amendment In Payment Of Bonus Act 2015

In Section 12 of the Principal Act, the words "Three Thousand and Five Hundred Rupees" at both the places where they occur are to be substituted with "Seven Thousand Rupees or the Minimum Wage for the Scheduled Employment, as fixed by the appropriate government, whichever is higher."

However, minimum wages are higher than Rs. 7,000/- in UP for engineering industries, and they are revised twice a year, i.e., effective from February and August every year.

How should we perform the calculation? Should we take the yearly average in this case, or should we use the monthly minimum wages for calculation purposes? Minimum wages differ for unskilled, semi-skilled, and skilled categories.

We have already paid ex-gratia for the year 2014-15. Can we adjust the ex-gratia payment in the bonus now that the person is covered under the bonus as per the amendment?

Lastly, when do we have to pay the arrear? Can we pay it next year, or do we have to pay it now?

Request the senior IR professionals or labor law advisors/advocates to please guide in the matter.

Dear Sir,

I have a little confusion as our organization is a Private Limited company situated in Faridabad, Haryana. I want to know if this amendment is applicable for limited or private limited companies or only for Government sectors. Please help me out.

Sir,

A gazette notification was previously circulated, but it has currently been stayed by a Kerala High Court order, enclosed for reference.

Thanks & Regards,

Sumit Kumar Saxena

Query on Bonus Calculation Under New Amendment

As per my understanding, under the new Bonus amendment, wages considered for bonus payment are INR 7,000 (Rupees Seven Thousand only) or wages earned as per the minimum wage rate, whichever is higher per month.

Sl. No. | Name of Workmen | Day Rate as per Minimum Wages | No. of Days Worked | Wages Earned | Wages Considered
---|---|---|---|---|---
1 | A | 278 | 25 | 6,950 | 7,000
2 | B | 337 | 25 | 8,425 | 8,425

My query is: if a workman in any month works for 2/3 days, should we consider his wages as Rs. 7,000/- for the calculation of the bonus, or should we consider his actual wages?

Sl. No. | Name of Workmen | Day Rate as per Minimum Wages | No. of Days Worked | Wages Earned | Wages Considered
---|---|---|---|---|---
1 | A | 278 | 5 | 1,390 | ***Rs. 7,000/- or Rs. 1,390/-

Kindly suggest.

Best Regards,
Shiv.

The bonus ceiling limit increased from Rs. 3500 to Rs. 7000. In my organization, the basic of some employees was less than Rs. 7000 (i.e. 6240) in the financial year 2015-2016.

Now my question is on which ceiling I need to calculate the bonus: on Rs. 7000 or on Rs. 6240? Can anyone help me?

Dear,

You have to do a calculation on 6240. It's the maximum limit, not the minimum. I hope you got it.

It's up to you whether you do 20% or 8.33%.

Dear Sir,

What is the applicability status of this amendment at the Delhi NCR location? It is still doubtful whether we have to implement this from April 2014 or not.

Looking forward to your valuable response.

Regards,
Sunil Sharma

Sir, can you please let me know the last date for the submission of bonus returns...

Thank you