Bonus Act 1965
The Payment of Bonus Act, 1965, mandates employers with 20 or more employees to pay an annual bonus to employees earning up to ₹21,000 per month (as per recent updates), provided they have worked at least 30 days in a financial year. The act ensures a minimum bonus of 8.33% of wages, with a maximum of 20%, usually paid within 8 months of the accounting year’s close.
Key Aspects of the Payment of Bonus Act, 1965:
Applicability: Applies to every factory and any establishment employing 20 or more people on any day during an accounting year.
Eligibility: Employees earning up to ₹21,000 per month and who have worked for at least 30 working days in that year are eligible.
Bonus Rates:
Minimum Bonus: 8.33% of the annual salary/wage.
Maximum Bonus: 20% of the annual salary/wage.
Calculation: Bonus is calculated based on the employee’s salary or wage, including basic and dearness allowance (DA), up to a stipulated limit.
Timeline: The bonus must be paid within 8 months from the close of the accounting year.
Disqualification: An employee can be disqualified from receiving a bonus if they are dismissed for fraud, riotous or violent behavior, or theft/sabotage.
Deductions: Authorized deductions, such as for festival bonuses paid in advance or financial loss caused by misconduct, can be made.
The Act is designed to share profits with employees, fostering improved industrial relations and productivity. For the full text and specific legal provisions.
The Factories Act, 1948 is an Indian labor legislation regulating safety, health, and welfare in factories, applying to premises with workers (with power) or workers (without power). It mandates safety officers, limits working hours to 48/week, requires proper sanitation, and prohibits child labor below 14 years.