The Payment of Bonus Rules, 1975
Under The Payment of Bonus Rules, 1975, an ‘employee’ is defined as any individual engaged for hire or reward, whether the terms of employment are written or implied, and includes supervisors/managerial and administrative staff earning not more than Rs. 21 thousand per month.
It also includes dearness allowance, which refers to all cash payments, regardless of name, made to an employee in response to an increase in the cost of living.
Where the Act is Applicable
It will apply to;
Every factory
Any other business that employs twenty or more people on any one day during the accounting year.
Time limit
Within a month of the award being executable or the settlement going into effect.
Within eight months of the end of the fiscal year.
Short info
Every employee earning less than Rs. 21,000 per month who has worked for at least 30 days in an accounting year is entitled to a bonus of at least 8.33 percent of his or her salary/wages, even if the establishment is losing money, with a maximum bonus of 20% of the employee’s salary/wages payable in an accounting year.
To know more about the Payment of Bonus Rules, 1975 download the PDF file link below.
