Government doubles monthly bonus calculation ceiling to Rs 7,000. The Cabinet decided to double the wage ceiling

The Cabinet decided to double the wage ceiling for calculating bonus to Rs 7,000 per month for factory workers and establishments with 20 or more workers.

"The Payment of Bonus (Amendment) Bill, 2015 to enhance the monthly bonus calculation ceiling to Rs 7,000 per month from existing Rs 3,500 was approved by Union Cabinet here," a source said after the Cabinet meeting.

The amendment bill will be made effective from April 1, 2015. Now the bill will be tabled in Parliament for approval.

The bill also seeks to enhance the eligibility limit for payment of bonus from the salary or wage of an employee from Rs 10,000 per month to Rs 21,000.

The Payment of Bonus Act 1965 is applicable to every factory and other establishment in which 20 or more persons are employed on any day during an accounting year.

At present, under Section 12, where the salary or wage of an employee exceeds Rs 3,500 per month, the minimum or maximum bonus payable to employees are calculated as if his salary or wage were Rs 3,500 per month.

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Dear Friends,
The Union Government has passed the Bonus ceiling limit from Rs. 10000/- to Rs. 21000/- please read the news articles.
Regards,
Dr. PBS KUMAR

It is yet to be in presented to the parliament for approval
So,it is not effective yet.

Dear Saswata,
Substance : Only parliament approval is not suffice .
Subsequent parliament approval (from both houses ie. Lok Sabha & Rajya Sabha) , the matter would be sent to Hon'ble President for his assent . After his assent , the official Gazette notification will be issued , then the said proposed Bonus Amendment is implemented as per the date mentioned in the said official Gazette Notification.
Since the Parliament session is not going as of now, the next session would starts in upcoming winter season only, likely in Nov- Dec'15, then the cabinet proposal would be tabled in Parliament.
Till time, the existing provisions of the Payment of Bonus Act/Rules would be applicable / followed for the Accounting year 14-15.
Anil Sharma

Hi All,
I don't see any hardship in approvals as opposition parties welcomed the decision.
Now employers should start working on financials impact which is going to be huge as 90% of employees would come under this cap of Rs.21000 as most of the organizations kept low basic wages irrespective of the salaries.
Regards,
Keshav Reddy

Yes. Actually it would have been better if the definition of wages would have been changed to gross wages as is in ESIC.

Dear Saswata ji,
I am accepting your proposal 'yes' it must be changed the difinition of 'wage' under all the labour laws. Each act is in various difinitions which is total confused. Either it should be full or specifically incorporate the components ( Basic, DA, VDA, etc.,). Apart from that the leave positions are also. In Shops and Estb.Act some states are specifically mentioned CL, SL, EL etc. but in Factories Act never mentioned other than EL.
Regards,
PBS KUMAR

PSB,
I wish your and my acceptance would solve the problem :)
Was just reading, in Bangladesh, there is an act called Bangladesh labour code. Just one act covering all stuff and making things smoother.

In India, persons who are required to follow the acts and rules can never understand them with out the help of an expert.
If every thing is simified where is the need for all experts?

LEAVE RULES, FACILITY – LEAVE ACT as in case of MB Act.
============================================
Recently; the Govt. has taken steps to simplify some of the Labour Acts to get benefit to the employees and also help Cos.for Compliance with simplified different Forms. However, as stated by other HR experts; confusion still remains due to different definitions under different Acts. The Govt. can make one definition for WAGES- possibly Gross Salary which is now taken for Leave calculation, Final settlement etc., in some Cos. rather than restricting it to Basic(+DA)- (No DA in most Cos.) for PF, Bonus, Gratuity whereas it is on Gross Salary for ESI. There is lot of mess due to Govt. not fixing one definition leading to calculation problem for OT & other benefits. We have FA, Shops & Estt. Act, Mines Act, PF, ESI, Bonus, MB Act etc., whereas no Specific Leave Act. As we have Festival & Holidays Act, SO, IDA, TU Acts etc., Govt. can make one Leave Act to make min. CL, SL & PL for all types of Cos. Since there is no fixed Leave Act, every Cos. small & big intreprete Leave to suite them & deny employees to take leave with pay even in urgency; since there is no Act compelling Management to give leave with pay. Leave clubbing, W/Off denial when leave is prefixed-suffixed is another nuisance; making HRMgr job; unhappy to administer P&A works.
As the Govt. is now taking steps to Amend / introduce Labour Welfare Acts, in line with ILO & progressive measures,
we request the Govt. to make a Separate LEAVE ACT for all Cos.
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