Presentation on

Payment of Wages Act 1936 &

Payment of Bonus Act 1965

By:-P.K.Singh, PGEXP/026/2012

Penalty for-a. Unauthorized deductions &b. Delayed payment of wages

MINIMUM RS. 1500/-

MAXIMUM RS.7500/-• Under sec.20(1) of PWA 1936.

Can the industrial adjudicators pass an award revising the wages downwards, i.e. to the prejudice to the workmen?

Depends.1.Adjudicators can- When there is an error of

facts in the wage revision.2.Otherwise- Binding.

Available SurplusSec(5)& Sec(6).

Available Surplus = Gross Profit – (Sl. No. 1 to 4)

1. Depreciation2. Development allowance3. Direct taxes payable for the accounting

year(sum specified in Third Schedule)4. Direct taxes in respect of gross profit for the

immediately preceding accounting year.

Allocable SurplusSec(4).

Allocable Surplus = 60% of Available SurplusOR

67% (other than banking).

-Make adjustment for SET ON & SET OFF:For calculating the amount of bonus in respect of an accounting year, allocable surplus is computed after considering the amount of SET ON & SET OFF from previous years as illustrated in Fourth Schedule.

How does the formula of set on & set off of Allocable surplus operate in determining the quantum of bonus payable in a given accounting year?

Refer the Fourth Schedule of PBA 1965 under Sec. 15 & Sec.16 of the Act.

Minimum qualifying period of service for claim of Bonus in an accounting year

• Should have worked in the establishment for not less than 30 working days in that year (Sec.8 of PBA 1965)

Disqualification for Bonus

If an employee 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.(Refer Sec.9 of PBA 1965)