Tuesday, October 20, 2015

Bonus : Ordinance likely to hike eligibility and calculation ceiling soon.

Workforce of the country has another reason to cheer in this festive season as the Narendra Modi-led government is set to promulgate an ordinance to amend Payments of Bonus Act 1965 to make more employees eligible for annual bonus.

According to the proposal, those earning up to Rs 21,000 (basic + DA) a month will now be eligible bonus. This would be a steep jump from the current ceiling of Rs 10,000 (basic + DA) per month. 

The Election Commission has approved the Labour Ministry’s proposal and the Union Cabinet is likely to take up the issue on promulgating ordinance next week. From this year onwards, bonus will be linked to minimum wages. The government is in the process of revising the minimum wages, a senior official in the Ministry of Labour told Deccan Herald.

In a recent meeting with trade unions and the ministry, the government agreed to amend the Bonus Act by enhancing the eligibility ceiling under section 2(13) of the Act from Rs 10,000 per month to Rs 21,000 month.

It also agreed to calculate ceiling under section 12 from Rs 3,500 per month to Rs 7,000 per month, or the minimum wage notified by the government for the category of employment, whichever is higher, an official in the Ministry told Deccan Herald.

Sources said despite reservations by the industry representatives on the revised ceilings, the government has decided to go ahead with the proposal.

Trade unions

Though the trade unions demanded the abolition on ceiling on payment of bonus due to rising inflation, the government rejected it.


The wage ceiling and the entitlement ceiling were last revised in 2007 and made effective retrospectively from 2006, said Saji Narayan, former president o B.M.S.

Source : Deccan Herald

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