Workers drawing up to Rs 10,000 monthly salary will have to be given bonus by employers. The decision to raise the eligibility salary limit from Rs 3,500 basic salary plus dearness allowance to Rs 10,000 was among the three amendments in the Payment of Bonus Act 1965 the cabinet approved on Monday.
Employees will also get a higher bonus. Employers are mandated to pay a minimum bonus of 8.33 per cent of the actual salary, up to a maximum of Rs 2,500. Employees with higher salaries than this ceiling do not receive higher bonus. This ceiling has been raised to Rs 3,500.
The scope of the bonus law largely applicable to organised sector workers has also been expanded to cover building workers. Labour Minister Oscar Fernandes said workers, who work with contractors on building operations for at least a month, would be eligible to avail a proportional bonus from their employers.
The bill incorporating the amendments will be put up for parliamentary approval during the Winter Session. An ordinance too is possible.
Prime Minister Manmohan Singh had last year acknowledged that the salary ceilings had been fixed more than a decade ago and promised trade unions a favourable decision.
With the possibility of mid-term polls looming large, the CPM-affiliated Centre for Indian Trade Unions had last month gone back to Fernandes to ask the government to deliver on Singh’s promise.
In recent weeks, the government has fast-tracked sops to unorganised sector workers.