Cabinet doubles monthly bonus calculation ceiling to Rs.7,000

The union cabinet on Wednesday approved doubling of the wage ceiling for calculating bonus to Rs.7,000 per month for factory workers and establishments with 20 or more workers.

"The Payment of Bonus (Amendment) Bill, 2015 to enhance the monthly bonus calculation ceiling to Rs.7,000 per month from the existing Rs.3,500, was approved by the union cabinet," an official source told reporters here after the cabinet meeting.

The amendment bill, to be tabled in Parliament, will be made effective from April 1, 2015, the source said.

The bill proposes enhancing the eligibility limit for payment of bonus from the salary or wage of an employee from Rs.10,000 per month to Rs.21,000.

The bill also provides for a new proviso empowering the central government to vary the basis of computing bonus.

Amending the Act to increase the wage and bonus calculation ceiling was one of government assurances given after the one-day strike last month by central trade unions.