Hello,
The recent amendment to the Payment of Bonus Act 1965 are yet in the form of an "Ordinance" though fully binding on all employers.
The said ordinance has four parts. But let me tell you that the method of "calculating" bonus is not changed. The applicability has changed in the following manner.
1) The changes are applicable from 1st April 2006 meaning that the bonus for the financial year 2006-2007 (payable before 30th November 2007) will have to be paid as per the provisions of the ordinance.
2) In the past the maximum salary/wage was Rs. 3500/- per month for being covered in the Act. This limit has been raised to Rs. 10,000/- This means that employees in receipt of salary/wage less than this amount would benefit from the amendment.
3) Derived bonus was in past payable at actual salary/wage upto Rs. 2500/- per month. If the salary/wage was greater that Rs. 2500/- p.m. but less than Rs. 3500/- p.m. then the bonus was payable as though the salary/wage was Rs. 2500/- p.n. only. And, if the salary/wage was greater than rs. 3500/- p.m. the concerned employee was NOT eligible to receive bonus!
4) Now with this ordinance/amendment the position is that if the salary/wage is below Rs. 3500/- then the bonus will be payable on the actual salary/wage. If the salary/wage is greater than Rs. 3500/- p.m. but less than rs. 10,000/- p.m. then the bonus will be paid as though the salary/wage was Rs. 3500/- p.m. only and if the salary/wage is greater than rs. 10,000/- p.m. then one would not be eligible to receive any bonus!
I hope the position is now clear to you. Kindly do not forget to look up the definition of wage under the act. It is "Basic Wage+D.A."
If you have queries, please do not hesitate in raising them.
Regards
samvedan
November 3, 2007