Is bonus payment mandatory under act
Ananta Karad
(Querist) 20 April 2013
This query is : Resolved
Dear All,
Is bonus benifit mandatory under bonus or other Act in India Specially in Maharashtra?
Please update on above....
Thanks & Regards,
Ananta Karad
Kumar Doab
(Expert) 21 April 2013
It is felt that you are referring to the statutory Bonus under THE PAYMENT OF BONUS ACT, 1965
1. Short title extent and application.- (1) This Act may be called the Payment of Bonus Act, 1965.
(2) It extends to the whole of India 2***.
(3) Save as otherwise provided in this Act, it shall apply to……………
The Act is applicable to:
a. (a) every factory
b. (b) every other establishment employing 20 or more persons.
The Government can, however, apply the Act to any establishment employing less that 20 but not less than 10 persons. An establishment to which the Act applies shall continue to be governed by the Act irrespective of any fall in the number of person employed therein. {Section 1}
According to sub-section (2) of Section 20, save as otherwise provided in sub-section (1), nothing in the Act shall apply to the employees employed by any establishment in public sector. By the said sub-section (1) the provisions of the Act are made applicable in relation to an establishment in public sector which sells any goods produced or manufactured by it or renders any services in competition with an establishment in private sector and earns income from such sale or services or both an quantified in the said sub-section.
The Act permits the Government to exempt any establishment from all or some of the provisions of the Act for a specified period and subject to specified conditions if, having regard to the financial position and other relevant circumstances of the establishment, it is of opinion that it will be in public interest to do so. {Section 36}
The newly set up establishment is exempted from paying bonus to its employees in the first five years following the year in which the employer sells the goods produced or manufactured by him. If, however, the employer derives profit in any of the first five year, he has to pay bonus for that year. The provisions of set on and set off are not applicable in such cases. {Section 16}
Raj Kumar Makkad
(Expert) 23 April 2013
Yes, This is mandatory as per specific Act.
