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Frequently Asked Questions

A curated and categorised database of common questions regarding the law.


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APPLICABILITY

1 To whom does the Bonus act apply ?

  • The Payment of Bonus Act extends to the whole of India and is applicable to every factory and to every establishment wherein 20 or more workers are employed 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 employees.
  • For the purpose of calculating the number of employees for applicability of the Act, part-time employees are also included.
  • Every employee not drawing more than Rs.10000 per month who has worked for not less than 30 days in an accounting year, shall be eligible for bonus.
  • Any establishment which has been covered under the Act once shall continue to be governed by the Act even if the number of persons employed therein at any time falls below 20.
2 To whom does the Bonus act apply ?

  • The Payment of Bonus Act extends to the whole of India and is applicable to every factory and to every establishment wherein 20 or more workers are employed 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 employees.
  • For the purpose of calculating the number of employees for applicability of the Act, part-time employees are also included.
  • Every employee not drawing more than Rs.10000 per month who has worked for not less than 30 days in an accounting year, shall be eligible for bonus.
  • Any establishment which has been covered under the Act once shall continue to be governed by the Act even if the number of persons employed therein at any time falls below 20.
3 If the number of employees working in an establishment becomes less than 20, will the Act apply?

Yes, the act will continue to apply once it has become applicable
4 If the number of employees working in an establishment becomes less than 20, will the Act apply?

Yes, the act will continue to apply once it has become applicable
5 What is Bonus ?

The object of the Payment of Bonus Act is to provide for the payment of bonus (linked with profit or productivity) to employees.
6 What is Bonus ?

The object of the Payment of Bonus Act is to provide for the payment of bonus (linked with profit or productivity) to employees.
7 Do new establishments have to pay bonus ?

A 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.
8 Do new establishments have to pay bonus ?

A 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.
9 Can an establishment be deemed to be newly set in case of a change in ownership ?

Even if ownership of an establishment is transferred, the establishment remains the same and it cannot be said to be a new establishment for the purpose of Bonus applicability
10 Can an establishment be deemed to be newly set in case of a change in ownership ?

Even if ownership of an establishment is transferred, the establishment remains the same and it cannot be said to be a new establishment for the purpose of Bonus applicability
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