COMPENSATION REGULATIONS IN INDIA

By:

Mayank Jain Soniya Tiwari Chinmayi Archana

Agenda

Minimum Wages Act, 1948 Payment of Bonus Act, 1965 Payment of Gratuity Act, 1972

1948  AN ACT TO PREVENT “SWEATED LABOUR AND EXPLOITATION OF LABOUR”  The Act extends to the whole of India  Requires the Central and State Govt. to fix minimum rates of wages in certain scheduled employment. -. Minimum wages fixed REVISED from time to time within 5 yrs.THE MINIMUM WAGES ACT. 3(1)(b)  .Sec.

water Contribution to PF Any travelling allowance Any gratuity payable on discharge . supply of light. 2(h)  All remunerations capable of being expressed in terms of money & includes HRA but does not include:     Value of any house accommodation.Wages Sec.

Important Sections     Minimum Wage – weather to be paid in cash or kind (Sec 11) Payment of Minimum Wages is obligatory on employer (Sec 12) Wages of a worker who works less than normal working day (Sec 15) Offences and Penalties (Sec 22) .

Wages slip in form XIII showing the above details to be given to every employee. net amount paid. ESI and other. date of payment and signature of respective employee.    . attendance & overtime. actual amount paid.Responsibility of the Employer to follow the directions and fix wages of the workers at the rate not less than the one fixed to maintain Register of Wages in form XI showing rate of wages payable. deductions for EPF.

shall apply the Act to any other establishment. production or productivity. wherein less than 20 workers are employed provided the number of persons employed is not less than 10.THE PAYMENT OF BONUS ACT. . including a factory to which the Factories Act. 1965     An Act to provide for the payment of Bonus to persons in certain establishments on the basis of profits. Applies to every establishment wherein 20 or more are employed The Appropriate Govt. 1948 applies. Extends to the whole of India.

theft or any other misconduct  Bonus of very person drawing salary between Rs 3500/.Eligibility to Bonus  employee whose salary/ wages does not exceed Rs 10000 per month  who has worked in the establishment for not less than 30 days  Not disqualified to claim bonus due to fraud.per month shall be calculated as if his salary were Rs 3500 pm .and Rs 10000/.

For calculating the number of working days     the days for which the worker has been laid off the days he has been on leave with pay the days he has been absent due to temporary disablement caused by an employment injury the days a woman employee has been on maternity leave shall be taken in to account. .

33% of salary/wages  Maximum 20% of salary/wages  Computation of bonus as per Schedule I to IV of the Act.  Adjust any interim bonus paid while making payment of the final bonus.Rate of Bonus  Minimum :8. .

. For this.Disputes on Bonus  The Bonus Act does not provide for any machinery to resolve disputes relating to bonus. the Industrial Dispute Act shall be referred to.

plantation and other establishment wherein 10 or more workers are employed. 1972  The Payment of Gratuity Act. mine.  . Applies to every factory. 1972 extends to the whole of India.THE PAYMENT OF GRATUITY ACT.

It is paid for the service rendered by him to the employer (Delhi Cloth and General Mills Co. Ltd Vs The Workmen) Gratuity is in the nature of a retirement benefit payable to an employee for a long and meritorious service.• It is not paid to an employee gratuitously or merely as a matter of boon. .

Gratuity is payable to an employee on termination of his employment after he has rendered continuous service for not less than five years    on his superannuation on his resignation on his death or disablement due to employment injury or disease Payment of Gratuity shall be forfeited: to the extent of the damage or loss caused by the employee to the property of the employer where the service of the employee is terminated due to misconduct .

Rate of gratuity  15 days wages for every completed year of service  The average pay of the monthly rated employee shall be taken by dividing the monthly salary/ wages by 26 and not by 30 .

average of the three months wages immediately preceding the day of leaving shall be taken as average rate of wage An employee in a seasonal establishment shall be paid @ seven days wages for each season .Piece rate workers and Seasonal establishments   For piece rated workers.

.5 lakh. but the maximum gratuity payable shall be Rs 3.Salary ceiling  The Amendment Act of 1994 removed the salary ceiling of an employee.

.Continuous Service  An employee is in service in a calendar year provided he has worked for   190 days in case employee is employed below the ground and 240 days in any other case.

) The days he/she has been     shall be taken as worked for the calculation of 190/240 days. laid off under an agreement or under the ID Act or as permitted by the Standing Orders on leave with pay absent due to temporary disablement due to employment injury on maternity leave .Continuous service (contd.

Raghavalu and Sons Vs Additional Labour Court. Andhra Pradesh. as the qualifying phrases ‘part thereof in excess of six months’ shall be taken only for calculation of gratuity and not for determining the eligibility of gratuity.For seasonal employment 75% attendance during a season shall constitute service in a year  An employee who has worked for 4 years 11 months and 10 days not eligible for gratuity as decided in P. .

THANK YOU .

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