THE PAYMENT OF BONUS ACT, 1965
THE PAYMENT OF BONUS ACT, 1965 AND THE PAYMENT OF BONUS RULES, 1975
Application:It shall apply to (a) every factory; and (b) every other establishment in which twenty or more persons are employed on any day during an accounting year. An establishment to which this Act applies shall continue to be governed by this Act notwithstanding that the number of persons employed therein falls below twenty.
Definition of employee:“Employee” means any person, other than an apprentice, employed on a salary or wage not exceeding, three thousand and five hundred rupees, per mensem in any industry to do any skilled or unskilled, manual, supervisory, managerial, administrative, technical or clerical work for hire or reward.
Eligibility for bonus:Every employee shall be entitled to be paid by his employer in an accounting year, bonus, provided he has worked in the establishment for not less than thirty working days in that year.
Payment of minimum bonus:Every employer shall be bound to pay to every employee in respect of the accounting year, a minimum bonus which shall be 8.33 per cent of the salary or wage earned by the employee during the accounting year or one hundred rupees, whichever is higher, whether or not the employer has any allocable surplus in the accounting year.
Payment of maximum bonus:Where in respect of any accounting year, the allocable surplus exceeds the amount of minimum bonus payable to the employees under that section, the employer shall, in lieu of such minimum bonus, be bound to pay to every employee in respect of that accounting year, bonus which shall be an amount in proportion to the salary or wage earned by the employee during the accounting year subject to a maximum of twenty percent of such salary or wage.
Time-limit for payment of bonus:All amounts payable to an employee by way of bonus under this Act shall be paid in cash by his employer, within a period of eight months from the close of the accounting year:
Application of Act to establishments in public sector:If in any accounting year, an establishment in public sector sells any goods produced or manufactured by it or renders any services, in competition with an establishment in private sector, and the income from such sale or services or both is not less than twenty percent of the gross income of the establishment in public sector for that year, then, the provisions of the Act shall apply in relation to such establishment in public sector as they apply in relation to a like establishment in private sector.
Reference of disputes under the Act:Where any dispute arises between an employer and his employees with respect to the bonus payable under this Act or with respect to the application of this Act to an establishment in public sector, then, such dispute shall be deemed to be an industrial dispute within the meaning of the Industrial Disputes Act, 1947.
Authorities under the act:a. Inspectors
Penalty:If any person contravenes any of the provisions of this Act or any rule or fails to comply with any direction or requisition, then he shall be punishable with imprisonment for a term which may extend to six months or with fine which may extend to 1000 rupees or with both.
Act not to apply to certain classes of employees: Nothing in this Act shall apply to: (i) Employees employed by the Life Insurance Corporation of India;(ii) Seamen as defined in the Merchant Shipping Act, 1958 (iii) Employees registered or listed under any scheme made under the Dock Workers (Regulation of Employment) Act, 1948, and employed by registered or listed employers;(iv)Employees employed by an establishment engaged in any industry carried on by or under the authority of any department of the Central Government or a State Government or a local authority;(v) Employees employed by— (a) The Indian Red Cross Society or any other institution of a like nature; (b) Universities and other educational institutions; (c ) Institutions (including hospitals, chambers of commerce and social welfare institutions) established not for purposes of profit;(vi)Employees employed through contractors on building operations;(viii) Employees employed by the Reserve Bank of India;(ix) Employees employed by— (a) the Industrial Finance Corporation of India;(b) any Financial Corporation or any Joint Financial Corporation established under the State Financial Corporations Act, 1951 (c) The Deposit Insurance Corporation;(d) The National Bank for Agriculture and Rural Development;(e) The Unit Trust of India;(f) The Industrial Development Bank of India;(fa) the Small Industries Development Bank of India (ff) the National Housing Bank;(g) any other financial institution (other than a banking company),being an establishment in public sector, which the Central Government may, by notification in the Official Gazette, specify, (xi) Employees employed by inland water transport establishments operating on routes passing through any other country.
Maintenance of registers:Every employer shall prepare and maintain the following registers, namely:–(a) a register showing the computation of the allocable surplus in Form A;(b) a register showing the set-on and set-off of the allocable surplus, in Form B;(c) a register showing the details of the amount of bonus due to each of the employees, the deductions under sections 17 and 18 and the amount actually disbursed, in Form C.
Annual returns:Every employer shall send a return in Form D to the Inspector so as to reach him within 30 days after the expiry of the time limit specified in section 19 for payment of bonus.