Code on Wages norms for the annual bonus

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  Code on Wages norms for the annual bonus

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1. According to a new provision in the Code on Wages 2019, ‘conviction for sexual harassment’ can be a ground for denying bonus payouts to employees.
2. As per the extant law, bonus dues are barred only in case of employees dismissed for fraud, violent conduct and theft or sabotage.
3. The new Code is expected to become operational once the government notifies the rules.
4. This move will serve as an additional deterrent apart from the Prevention Of Sexual Harassment (POSH) law of 2013.

POSH law guidelines - 

1. As per the Prevention of Sexual Harassment (POSH) law of 2013, firms are required to form an Internal Complaints Committee (ICC) to inquire into complaints of sexual harassment at the workplace.
2. The Committee is required to make recommendations to employers on the action required according to its inquiry in such complaints.
3. The ICC has the powers to decide if someone is guilty and report it further to the police, though not all sexual harassment cases translate into a police case.
4. Under the POSH Act, sexual harassment includes any one or more of the following unwelcome acts or behaviour (whether directly or by implication) - Physical contact and advances; A demand or request for sexual favours; Making sexually coloured remarks; Showing pornography; Any other unwelcome physical, verbal or non-verbal conduct of sexual nature.

Payment of Bonus Act, 1965

1. The minimum bonus payable under the Payment of Bonus Act, 1965 is 8.33% of the salary or wage earned by the employee during the accounting year.
2. This bonus is subject to a maximum of 20% of such salary or wage.
3. This bonus is applied to all employees earning a salary of up to Rs 21,000 a month.
4. The salary and bonus payment limits are yet to be notified under the Code on Wages.
5. Section 29 of the Code states that Notwithstanding anything contained in this Code, an employee shall be disqualified from receiving bonus under this Code if: He is dismissed from service for fraud or riotous or violent behaviour while on the premises of the establishment or theft, misappropriation or sabotage of any property of the establishment or conviction for sexual harassment.
6. Other disqualification triggers are explicitly restricted to actions on an employer's premises, the trigger referring to conviction under sexual harassment does not include such a condition about the location of the incident.

Code on wage, 2019

1. The code on wage 2019, consolidate four acts- payment of wages ct, 1936, minimum wage act, 1948, Payment of Bonus Act, 1965 and Equal Remuneration Act, 1976 — into a single code.
2. The Second National Commission on Labour (Ravindra Varma, 2002) suggested consolidating all labour laws into four codes.
3. The Code will have the same definition of the term “worker”; but, a person employed in a supervisory capacity drawing up to ₹15,000 will also be considered a worker.
4. Before wage code, there is, Minimum Wages Act, which provides to fix minimum wage in employment which has more than 1,000 workers to be first included in the Schedule, and, thereafter, minimum wages will be fixed as per law.
5. The new Code has dispensed with the necessity of having minimum workers and inclusion in schedule.
6. The central government will have the power to fix a floor wage. Once it is fixed, State governments cannot fix any minimum wage less than it.

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