The Lok Sabha on Tuesday (22 December 2015) passed a bill to amend the act on bonus payments to double, to Rs.7,000 per month, the wage ceiling for calculating bonus for factory workers and of some other establishments.
The Payment of Bonus (Amendment) Bill, 2015 was passed after a reply by Labour Minister Bandaru Dattatreya. This Bill had been introduced in Lok Sabha by Bandaru Dattatreya on December 7, 2015. The Bill seeks to amend the Payment of Bonus Act, 1965.
The Payment of Bonus Act, 1965, provides for annual payment of bonus to employees of certain establishments including factories and establishments employing 20 or more persons. Under the Act, bonus is calculated on the basis of the employee’s salary and the profits of the establishment. The new amendment seeks to increase eligibility limit for payment of bonus to employees whose salary is up to Rs.21,000 per month from the present Rs.10,000 per month.
The said Act provides that the bonus payable to an employee will be in proportion to his or her salary or wage. But, if an employee’s salary is more than Rs 3,500 per month, the salary will be assumed to be Rs 3,500 per month only for the purposes of calculation of bonus. The Amendment Bill seeks to raise ceiling for calculation of bonus to Rs.7,000 per month or the minimum wage notified from the present Rs.3,500 per month.
