PAN India PT Slab for Ready Reckoner 2016

Compiled by Rahul Kumar

Full explanation of The Payment of Bonus (Amendment) Act, 2015

Full explanation of the amendment in the Bonus Act is given below :

First of all, giving you permutation and combination of application of basic wages for calculation of bonus amount with examples.

Point No.1

In the State of Maharashtra, there are about 61 scheduled industries  as mentioned in clause (g) of section 2 of the Minimum Wages Act, 1948.

If you refer to cashew processing industry, the basic + DA rate for skilled, semi skilled and unskilled is shown in the table below.  Going by the basic wages of 5481.5 and 5281.5 and 5081.50, the basic wages is lower than the amended limit of 7000 and the amendment says whichever is higher i.e. 7000 as against  the minimum wages for the scheduled employment (in this case – cashew processing).  
However, check Sec 12 where it says, if the Basic is more than Rs.7000 and then it should be Minimum Wages or 7000 whichever is higher. Thus , the actual min wage less than 7000 will be required to be taken.

Cashew Processing	Special Allowance = 2481.5
Skilled	3000	2481.5	5481.5
Semi-skilled	2800	2481.5	5281.5
Un-skilled	2600	2481.5	5081.5

Another example of a lower minimum wages is shown in the table below ;

Readymade Garments	Special Allowance = 2204 (Zone 1)  MPallika    Zone II  (Corporation)           Zone III (Gram Panchayat)
Skilled	4160	2204	6364		4060	2204	6264		3760	2204	5964
Semi-skilled	4060	2204	6264		3960	2204	6164		3660	2204	5864
Un-skilled	3960	2204	6164		3860	2204	6064		3560	2204	5764

In this case, the basic wages for skilled is 6364 and for zone II, it is 6264 and for Zone III, it is 5964.  Therefore, as per amendment, bonus payable will be 6364, 6264 and 5964 as it is not coming under purview of Sec 12.

Shown below is wooden furniture scheduled industry and here again the basic wages is lower than the limit of 7000 and therefore actual minimum wages as Bonus which is less than 7000 to be given.

Wooden Furniture	Special Allowance = 2128
Skilled	3610	2128	5738		3510	2128	5638		3410	2128	5538
Semi-skilled	3510	2128	5638		3410	2128	5538		3310	2128	5438
Un-skilled	3410	2128	5538		3310	2128	5438		3210	2128	5338

Point No.2

In the following scenario, the equation changes and live examples of scheduled industry where the basic wages is higher than the limit of 7000 is shown in the table below :  These values and examples are taken for the current period, however, while calculating, the values of that earlier period of financial year April 2014 to March 2015 will be required to be considered and not the current value shown in the table which is only an example .  BPO / IT / ITES establishment comes under Shop Act and  the scheduled industry – Shops & Establishment rate will apply as per that period existing rate.  However, the difference here is that the basic wages for skilled, semi skilled and unskilled is 8440.6, 8040.60 and 7640.60.  The amendment says substitute with 7000 or minimum wages for the scheduled employment whichever is higher and here we will be required to pay 8440.60, 8040.60  and 7640.60 which is higher than the required limit of 7000 as per rate existing at that time.

Gurgaon city during the reign of Emperor Akbar, it was under the state of Agra and Delhi, however, now it is showing under the State of Haryana.  In Haryana, under shop act, highly skilled is 6737, skilled is 6407 and skilled A is 6268, and so on while you are showing Gurgaon skilled wages as 10659.  However, if it is Delhi, then the skilled category for clerical is 12142, semi skilled is 11154 and unskilled is 10140.  All this will be required to be examined carefully.

Shops & Commercial Establishments	Special Allowance =2640.6
Skilled	5800	2640.6	8440.6		5500	2640.6	8140.6		5200	2640.6	7840.6
Semi-skilled	5400	2640.6	8040.6		5100	2640.6	7740.6		4800	2640.6	7440.6
Un-skilled	5000	2640.6	7640.6		4700	2640.6	7340.6		4400	2640.6	7040.6

Take another example of construction industry where the basic wages is much higher as follows :

Construction of Roads/Buildings	Special Allowance =2698
Skilled	10100	2698	12798		9700	2698	12398		9300	2698	11998
Semi-skilled	9400	2698	12098		9000	2698	11698		8600	2698	11298
Un-skilled	8900	2698	11598		8500	2698	11198		8100	2698	10798

Here for skilled, it is 12798 and for semi skilled, it is 12098 and for unskilled, it is 11598.  Therefore, bonus amount that will be required to be paid will be 12798, 12098 and 11598.  However, please note that the figures will be required to be looked at State wise and for the earlier period and skilled category wise on these combination basis.

Point No.3

The employees who were already paid bonus for the period April 2014 to March 2015 as per the old rate for them the bonus payable is in on stay by various high courts across India

Point No.4

All those who have left in that period, will also be required to be paid as per above statement taking into account various factors.

Point No.5

Please note that bonus calculation will be on “earned days”

Point No.6

Where International employees have been paid 20% while domestic employees have been paid 8.33%,  applying the above criteria and calculating as per new system, adjustments of amounts paid can be done provided they do not fall below the new amendment level.  Also, if there is any kind of customary bonus paid like ex-gratia, pooja etc. there is a potential possibility of adjustment.

Point No.7

Earlier, percentage of 8.33% played an important role since on min. limit of 3500, 8.33% worked out to 292/- per month x 12, it came to 3500.  Now with the new condition of whichever is higher, this 8.33% will not be that prominent because it speaks of whichever is higher.  Therefore, when we do 7000 x 8.33%, it itself comes to 7000 but the substantiating condition is whichever is higher and thus this higher rate dilutes the 8.33 percentage if it is more than 7000.

We would like to inform you that, following amendment has taken place vide notification dated 01^st January 2016 in respect of The Payment of Bonus (Amendment) Act, 2015,

[if !supportLists]·        [endif]In section 2 of Payment of Bonus Act, 1965, clause (13) for the words “ten thousand rupees” the words “twenty-one thousand rupees” shall be substituted.

[if !supportLists]·        [endif]In section 12 of Payment of Bonus Act, 1965,

i. for the words “three thousand and five hundred rupees” at the both places where they occur, the words “seven thousand rupees or the minimum wage for the scheduled employment, as fixed by the appropriate Government, whichever is higher” shall respectively be substituted:    

ii. The following Explanation shall be inserted at the end, namely :- “Explanation. – For the purpose of section, the expression “scheduled employment” shall have the same meaning as assigned to it in clause (g) of section 2 of the Minimum Wages Act, 1948’

Minimum Wages Act

Section 2: Interpretation

 (g) "scheduled employment" means an employment specified in the Schedule, or any process or branch of work forming part of such employment ;

[if !supportLists]·        [endif]In section 38 of Payment of Bonus Act, 1965, for sub-section (1), the following sub-section shall be substituted, namely :-

            “(1) The Central Government may, subject to condition of previous publication, by notification in the Official Gazette, make rules to carry out the provisions of this Act.”    

Since  this  has  come into force from 1st day of April 2014, and  is to be implemented retrospectively, therefore arrears will have to be paid accordingly.

    

The above amendment deemed to be applied with effect from 01^st April 2014 onwards which you may please note. If you have already paid Statutory Bonus considering wage ceiling of  Rs.3500.00 and bonus eligibility of Basic salary up to Rs. 10000.00 for the financial year 01^st April 2014 to 31^st March 2015, then you will have to pay arrears considering wage ceiling of Rs. 7000.00 and bonus eligibility of Basic salary up to Rs.21000.00. After paying the arrears, Revised Form D needs to be filed to the authority for the said year which you may please note.


In the end and nutshell, if Wages as per Bonus Act is higher than 7000, need to pay atleast 7000 or Minimum Wages whichever is higher as per Sec 12 of Payment of Bonus Act, 1965.

However, if the Wages as per Bonus Act is less than 7000, for e.g. 6000, then the said actual wages would be considered for bonus i.e. 6000