Page 154 - DCOM207_LABOUR_LAWS

Unit 9: Payment of Bonus Act, 1965

9.3 Eligibility and Disqualification of Bonus Notes

The explanation and criteria for Eligibility and Disqualification of Bonus are given below:

9.3.1 Eligibility for Bonus [Sec. 8]

Every employee receiving salary or wages upto ` 3,500 p.m. and engaged in any kind of work
whether skilled, unskilled, managerial, supervisory etc. is entitled to bonus for every accounting
year if he has worked for at least 30 working days in that year.

Notes This ceiling of ` 3,500 has been revised to ` 10,000 with effect from November,
2007.

“Salary or wages” means all remuneration (other than remuneration in respect of over-time
work), includes dearness allowance but does not include:
(i) any other allowance
(ii) the value of any house accommodation or of supply of light, water, medical attendance
or other amenity or of any service or of any concessional supply of food grains or other
articles;
(iii) any travelling concession;
(iv) any bonus (including incentive, production and attendance bonus);
(v) any contribution paid or payable by the employer to any pension fund or provident fund;

(vi) any retrenchment compensation or any gratuity or other retirement benefit;
(vii) any commission payable to the employee.
!

Caution Free food allowance or free food by his employer, such food allowance or the
value of such food in lieu of salary is deemed to form part of the salary or wages of such
employee.

Did u know? Payment of Minimum Bonus: 8.33% of the salary or ` 100 (on completion of
5 years after 1st Accounting year even if there is no profit).

9.3.2 Disqualification of Bonus

Notwithstanding anything contained in this Act, an employee shall be disqualified from receiving
bonus under this Act, if he is dismissed from service for –

(a) fraud; or
(b) riotous or violent behavior while on the premises of the establishment; or
(c) theft, misappropriation or sabotage of any property of the establishment.

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