Unit 5: The payment of Bonus Act, 1965 and amendments
The Payment of Bonus Act, 1965
Objective:To provide a statutory right to employees to receive bonus as a reward for their contribution to the company’s profitability.
Key Provisions
Amendments
2015 (Notified in 2016)
- Wage Ceiling Increased: From ₹10,000 to ₹21,000/month
- Bonus Calculation Limit Increased: From ₹3,500 to ₹7,000/month (or minimum wage, whichever is higher)
- Retrospective Effect: Applicable from April 1, 2014
Proposed Changes under Code on Wages, 2019:
- The Code on Wages, 2019 consolidates the Payment of Bonus Act with other wage-related laws.
- Still not implemented: Final implementation pending as of 2024.
The Payment of Gratuity Act, 1972
Objective: To provide a lump-sum retirement benefit to employees as gratitude for long-term service.
Key Provisions
Amendments
Gratuity (Amendment) Act, 2018
- Tax-Free Limit Raised: From ₹10 lakhs to ₹20 lakhs
- Maternity Leave Considered: Maximum maternity leave of 26 weeks included in continuous service calculation for eligibility
- Applicability to Private Sector: Brings parity between public and private sector employees
Summary Table
The Maternity Benefit Act, 1961
Objective: To regulate the employment of women before and after childbirth and to provide maternity and other related benefits.
Key Provisions
Amendments
📅 Maternity Benefit (Amendment) Act, 2017
- Maternity leave extended from 12 weeks to 26 weeks
- Introduced adoption and commissioning mother benefits
- Work from Home option after maternity leave based on mutual agreement
- Crèche Facility mandatory with 4 visits allowed per day (including rest breaks)
Employee’s Provident Fund & Miscellaneous Provisions Act, 1952
Objective: To provide retirement savings and social security to employees in the form of a provident fund, pension, and insurance.
Key Schemes under EPF Act
- EPF Scheme (1952) – Provident Fund
- EPS Scheme (1995) – Employee Pension Scheme
- EDLI Scheme (1976) – Employee Deposit Linked Insurance
✅ Key Provisions
Amendments and Key Updates
📅 Recent Reforms & Digitization
- UAN mandatory for portability and e-KYC linking
- EPFO e-Sewa portal for online claims and updates
- Aadhaar linkage mandatory for all members
- Employees can now file claims online for PF withdrawal, pension, or advance
📅 2020 COVID-19 Relief
Non-refundable advance of up to 75% of PF balance or 3 months’ basic wages, whichever is lower
