Compliance Requirements under the Rules in Accordance with the Code

1. Payment of Bonus to employees in U.P. (Section 26, 39; Rule 21-27)

Bonus shall be paid to the employee within 8 months from the end of FY as per the provision of this code .

The Code on Wages, 2019 consolidates and simplifies four central labour laws relating to wages and remuneration. It subsumes the Payment of Wages Act, 1936 (ensuring timely and full payment of wages without unauthorized deductions), the Minimum Wages Act, 1948 (providing for fixation of minimum wages across all employments, now extended universally), the Payment of Bonus Act, 1965 (relating to statutory bonus payable to eligible employees based on profits and productivity, though its provisions continue separately until notified under the Code), and the Equal Remuneration Act, 1976 (ensuring equal pay and non-discrimination for men and women workers). Together, the Code seeks to establish a uniform definition of wages, streamline compliance, and provide a single framework for wage-related matters across sectors and establishments.

2. Payment of Minimum Bonus as specified in U.P. (Section 26)

Employers shall be required to pay a minimum bonus of 8.33% of wages or Rs. 100, whichever is higher, regardless of profit or loss. If the company has a surplus, the bonus can go up to a maximum of 20% of wages.

1. Any additional bonus demands based on production or productivity shall be agreed between the employer and employees, and the total bonus cannot exceed 20% of annual wages.
2. Bonus for New Establishments: For the first 5 years, bonus is only payable if the establishment makes a profit, calculated without section 36. In the 6th and 7th year, specific modifications to section 36 apply. From the 8th year, section 36 applies as usual.
3. Please refer Chapter IV of the Code On Wages, 2019 and Chapter V of Code on Wages (Central) Rules, 2020 for more details.

     3. Deposit of unpaid amount due under the Code in case of death of employee/whereabouts being unknown (Section 44(1)(a); Rule 35)

Where amount payable to an employee under the Code is due after his death/whereabouts being unknown and amount could not be paid to nominee of employee until expiry of 3 months from date amount had become payable, then such amount shall be deposited by employer with jurisdictional Labour Welfare Commissioner / Assistant Commissioner of Labour

4. Deposit of the undisbursed dues to Labour Welfare/Asst. Commissioner (Section 44(1)(b); Rule 36 & 37)

Where any amount payable to an employee under this Code remains undisbursed because either no nomination has been made by such employee or for any other reason, such amounts could not be paid to the nominee of employee until the expiry of six months from the date the amount had become payable, all such amounts shall be deposited by the employer with the Labour Welfare Commissioner/ Assistant Commissioner of Labour having jurisdiction before the expiry of the fifteenth day after the last day of the said period of six months. Such amount shall be invested in the Central/State Government Securities or deposited as a FD in a nationalized bank.