The
Cabinet on Wednesday 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.
The bill also
provides for a new proviso in Section 12 which empowers the central government
to vary the basis of computing bonus.
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.
The last
amendment to both the eligibility limit and the calculation ceilings under the
said Act was carried out in 2007 and was made effective from April 1, 2006.
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