The Payment of Bonus (Amendment) Act, 2015

The Payment of Bonus (Amendment) Act, 2015 received the assent of the President on 31st December, 2015 and was passed to amend the Payment of Bonus Act, 1965.

The Amendment Act amended Section 2(13) of the Principal Act to increase the eligibility limit of an employee from the current level of those who paid a salary or wages of Rs. 10,000 to Rs. 21,000 per month to receive benefits under the Act. It further amended Section 12 of the Principal Act. Prior to Amendment, the amount of bonus payable to an eligible employee whose salary or wages exceeded Rs. 3500 was to be calculated as if his salary or wages was Rs. 3500. After the amendment this has been raised to Rs. 7,000 or minimum wage specified, whichever is higher. The Amendments come into force w.e.f 1.4.2014 retrospectively.

The Payment of Bonus Act applies to establishments that have 20 or more employees.

An employee has been defined as any person (other than an apprentice) employed on a salary or wage not exceeding twenty-one thousand rupees per mensem in any industry to do any skilled or unskilled manual, supervisory, managerial, administrative, technical or clerical work of hire or reward, whether the terms of employment be express or implied

 Salary or wages have been defined as to mean all remuneration (other than remuneration in respect of over-time work) capable of being expressed in terms of money, which would, if the terms of employment, express or implied, were fulfilled, be payable to an employee in respect of his employment or of work done in such employment and includes dearness allowance (that is to say, all cash payments, by whatever name called, paid to an employee on account of a rise in the cost of living), but does not include (i)   any other allowance which the employee is for the time being entitled to; (ii)   the value of any house accommodation or of supply of light, water, medical attendance or other amenity or of any service or of any concessional supply of foodgrains or other articles; (iii)   any travelling concession; (iv)   any bonus (including incentive, production and attendance bonus); (v)   any contribution paid or payable by the employer to any pension fund or provident fund or for the benefit of the employee under any law for the time being in force; (vi)   any retrenchment compensation or any gratuity or other retirement benefit payable to the employee or any ex gratia payment made to him; (vii) any commission payable to the employee;

 

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