Payment of Bonus Act
An Act to provide for the payment of bonus to persons employed in certain establishments on the basis of profits, production, or productivity and for matters connected therewith.
Applicability
- Every factory and every other establishment in India in which persons exceeding state specific threshold limit are employed on any day during an accounting year.
- Any person (other than an apprentice) employed on a salary or wage not exceeding Rs. 21,000/- p.m. in any industry to do any skilled or unskilled, manual, supervisory, managerial, administrative, technical, or clerical work for hire or reward whether the terms of employment be expressed or implied.
- Employer shall compute – Allocable Surplus, Set-on & Set-off of Allocable Surplus and Bonus paid statement.
- Every employer shall send a Annual Return in the given format to the Inspector so as to reach him/her within 30 days after the expiry of the time limit specified in Section 19 of the Payment of Bonus Act.
- Bonus amount payable to an employee under this Act shall be paid by his/her employer within a period of eight months from the close of the accounting year.
- Employees can be disqualified from bonus payments if they are dismissed by fraud, misconduct, or even absenteeism. The employer needs to ensure that on dismissal, the procedures of domestic inquiry, proper documentation and employee acceptance of the misconduct are all carried out as per the standing orders before disqualifying the bonus payment.