Lok Sabha passes The Payment of Bonus (Amendment) Bill, 2015

The Lok Sabha has passed The Payment of Bonus (Amendment) Bill, 2015 to allow doubling of wage ceiling for calculating bonus of factory workers and establishments with 20 or more workers.
The Bill seeks to amend the Payment of Bonus Act, 1965 and was introduced in Lok Sabha by the Minister of State (MoS) for Labour and Employment.
Key provisions of Bill

  • Eligibility of Employees: Seeks to raise the eligibility limit for payment of bonus from a salary of Rs 10,000 to Rs 21,000 a month. The parent Act mandates payment of bonus to employees’ whose salary or wage is up to Rs 10,000 per month.
  • Calculation of bonus: The Bill seeks to raise this calculation ceiling of bonus to Rs. 7,000 per month from present from Rs 3500 per month ceiling or as per the minimum wage notified for the employment under the Minimum Wages Act, 1948 (whichever is higher).
  • The parent Act clearly mentions that the bonus is payable to an employee in proportion to his or her salary or wage.
  • Prior publication of rules: The Bill seeks to mandate prior publication of rules made by the Union Government in the Official Gazette to allow for more public consultation.
  • Retrospective effect: The Bill will have retrospective effect and will come into force on April 1, 2015.

The Payment of Bonus Act, 1965: It provides for the annual payment of bonus to employees of certain establishments including factories and other. Under the Act, bonus is calculated on the basis of the employee’s salary and the profits of the establishment.



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