Do you know the applicable minimum wages for your industry?
No !!! then it is time for you to get it and revise your compensation structure. This is not just for wages but it is also mandatory for paying bonus as well.
The Payment of Bonus(Amendment) act, 2015 received the assent of the President on 31st December 2015. This amendment was done to the Payment of Bonus act passed in 1965 and latest amended in 2007.
The salient features of the Payment of Bonus amendment act 2015 are as follows
- Eligibility limit of the employee under salary or wages increased from Rs 10000 to Rs 21000 per month
- Minimum Bonus amount has been changed from Rs 3500 to Rs 7000.
- Effective date in retrospect from 1st April, 2014.
As an employer you would be worried about the implications of the act. To get a better understanding of this we compare below what the changes are compared to the earlier act passed in 1965 and last amended previously in the year 2007.
The salient features of this amendment are as follows over the previous Payment of bonus act 1965 is as follows
|Criteria||Payment of Bonus Act 1965 (Amendment, 2007)||Payment of Bonus amendment Act 2015|
|Applicable wef||In retrospect from 1st april 2014|
|Minimum Bonus||INR 3500||INR 7000 or Minimum wage whichever is higher|
- Every factory and every other establishment in India in which 20 or more persons are employed on any day during an accounting year.
- Any person (other than an apprentice) employed on a salary or wage not exceeding Rs. 21,000/- p.m. in any industry to do any skilled or unskilled, manual, supervisory, managerial, administrative, technical, or clerical work for hire or reward whether the terms of employment be expressed or implied.
The retrospective effect on this change has already been challenged and the Hon’ble High Courts of Kerala, Madhya Pradesh and Karnataka have issued interim stay orders.
So for the time being the status of revision with retrospective effect is uncertain. However for the current accounting year ( 2015 -16), the revised rules are applicable. You can also find the copy of the act. click here.