Commissioner of Labour

Payment of Bonus Act, 1965

This Act imposes a Statutory obligation on all employers employing 10 or more workers in their factories or establishments in Maharashtra State to pay bonus to the employees at the minimum rate of 8.33 percent or up-to 20 percent subject to the formula laid down in the Act. The Act applies to factories or establishment from the year they start making profits or from the sixth year onwards whichever is earlier. It provides for payment of bonus linked with a scheme of 'set on' and 'set off'. It also provides for a scheme of bonus linked with productivity subject to a minimum of 8.33 percent. It further provides for machinery for enforcement of the liability for payment of bonus. Any person (other than an Apprentices) employed on a salary not exceeding र 7, 500 per month, is entitled to bonus. An employee’s drawing wages above र 3,500 are, however, entitled to bonus, as if his salary id र 3.500 per month. An employee, who is dismissed for fraud, riotous or violent behavior on the premises of the establishment, theft, misappropriation or sabotage of any property of the establishment is disqualified from receipt of bonus, under the Act. A minimum service of 30 day work in one accounting year is a necessity for eligibility of bonus under the Act.

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