Union Cabinet sanctions the Payment of Bonus (Amendment) Bill, 2015

The Payment of Bonus (Amendment) Bill, 2015 (“Bill”) which seeks to amend the Payment of Bonus Act, 1965 (“Act”) was introduced in the Lok Sabha by the Minister of State for Labour and Employment on 7th December 2015 & was passed by Lok Sabha on 22nd December 2015 and subsequently by the Rajya Sabha. The Act provides for the annual payment of bonus to employees of certain establishments including factories and establishments employing 20 or more persons. The Bill once enacted shall:

  1. Raise the employee eligibility threshold for payment of statutory bonus to INR 21,000 per month from the current limit of INR 10,000 per month;
  2. Enhance the wage ceiling for computing bonus from INR 3,500 per month to INR 7,000 per month;
  3. Mandate prior publication of the rules made to implement the provisions of the Act in the Official Gazette to allow for more public consultation.

The Bill will be effective retrospectively from 1st April 2014.

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