Employers’
Obligations
- To notify
regarding opening of establishment to the controlling
authority.
- To correctly
ascertain the amount of gratuity payable and pay the
same accordingly.
- To obtain
an insurance in the prescribed manner for his liability
for payment of gratuity under the Act or establish
approved Gratuity Fund in the prescribed manner.
PAYMENT
OF BONUS ACT, 1965
Objectives
The
payment of Bonus Act, 1965 aims at providing for the
payment of bonus to the employees of certain establishments,
on the basis of profits or production or productivity
and for matters connected therewith.
Applicability
The
Act applies to every factoryand every other establishment
employing not less than 20 persons on any day during
an accounting year.
The
Central/State Government can, however, extend its provisions
to any establishment employing less than 20 but more
than 10 persons.
The
establishments covered under the Act shall continue
to pay bonus even if the number of employees falls below
10, at a later date.
Eligibility
Every
employee (other than an apprentice) receiving salary
or wages up to Rs.3,500 per month and engaged in any
kind of work whether skilled, unskilled, manual, managerial,
supervisory, technical, clerical,etc. is entitled to
bonus for every accounting year, if he has worked for
at least 30 working days in that year.
Employees
of the general insurance companies, LIC, Central/State
Government establishments, Indian Red Cross Society,
Universities and Educational Institutions, Hospitals,
Chambers of Commerce, Reserve Bank of India, Industrial
Finance Corporation of India, Unit Trust of India,Social
Welfare Institutions, Local Bodies, etc. are not entitled
to bonus under the Act. What they are paid as bonus,
is ex-gratia payment.
Salary
or Wage
Salary
or wage means basic pay plus dearness allowance.Payment
received by way of encashment of leave will not form
salary or wages for the purpose of the Act. However,
for purposes of calculating the salary or wage all the
four allowances, viz. Ad-hoc, family, house rent and
tiffin allowances, would be included.
Allocable
surplus
‘Allocable
surplus’ means -
- In relation
to an employer, being a company other than a banking
companywhich has not made the arrangements prescribed
under the Income Tax Act for the declaration and payment
within India of the dividends payable out of its profits
in accordance with the provisions of section 194 of
that Act, sixty-seven per cent of the available surplus
in an accounting year.
- In any
other case, sixty per cent of such available surplus.
Minimum
Bonus
The
minimum bonus which an employer is required to pay even
if he suffers losses during the accounting year or there
is no allocable surplus (except in case of new establishments),is8.33%
of the salary or wages of the employee during the accounting
year.
Maximum
Bonus
iif
in any accounting year, the allocable surplus exceeds
the amount of minimum bonus, the employer shall pay
bonus in proportion to the salary or wages earned by
the employee during that accounting year, subject to
a maximum of 20% of such salary or wages.
Mode
and Time for Payment of Bonus
Bonus
should be paid in cash and within 8 months from the
close of the accounting year.Bonus is payable only annually.
Employers’
Obligations
- To calculate
and pay the annual bonus as required under the Act.
- To maintain
the prescribed registers and file annual returns of
bonus paid.
EMPLOYEES’
STATE INSURANCE ACT, 1948
Objectives
The
Employees’ State Insurance Act, 1948 aims to provide
certain benefits to the workers in case of sickness,
maternity and employment injury including occupational
diseases,through a contributory fund.
Applicability
The
Act applies to all factories other than seasonal factories,
using power in the manufacturing process and employing
10 or more persons and factories not using power but
employing 20 or more persons for wages.
The
Act contains enabling provision under which the ‘appropriate
government’ is empowered to extend the provisions
of the Act to other classes of establishments –
industrial, commercial, agricultural or otherwise.Under
this provision, most of the State Governments have extended
the provisions of the Act to the following classes of
establishments-
Shops,
hotels, restaurants, cinemas including preview theatres,
road motor transport agencies, newspapers establishments
etc.employing 20or more persons.
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