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1. What is meant by Contract Labour
A A workman shall be deemed to be employed as "contract labour" in or in connection with the work of an establishment when he is hired in or in connection with such work by or through a contractor, with or without the knowledge of the principal employer.
2. What is appropriate Government?
A 'Appropriate Government' means i) in relation to any Industrial Disputes concerning any industry carried on by or under the authority of the Central Government or by a railway Company [or concerning any such controlled industry as may be specified in this behalf by the central Government or in relation to an Industrial Dispute concerning [a Dock Labour Board established under Section 5-A of the Dock Workers (Regulation of Employment) Act, 1948 or [ the Industrial Finance Corporation of India Limited formed and registered under the Companies Act, 1956], or the Employees' State Insurance Corporation established under Section 3 of the Employees' State Insurance Act, 1948, or the Board of Trustees constituted under Section 3-A of the Coal Mines Provident Fund and Miscellaneous Provisions Act, 1948, or the Central Board of Trustees and the State Board of Trustees constituted under Section 5-A and Section 5-B, respectively, of the Employees' Provident Fund and Miscellaneous provisions Act, 1952, or the Life Insurance Corporation of India established under Section 3 of the Life Insurance Corporation Act, 1956 or [the Oil and Natural Gas Corporation Limited registered under the Companies Act, 1956] or the Deposit Insurance and Credit Guarantee Corporation established under Section 3 of the Deposit Insurance and Credit Guarantee Corporation Act, 1961, or the Central Warehousing Corporation established under Section 3 of the Warehousing Corporations Act, 1962 or the Unit Trust of India established under Section 3 of the Unit Trust of India Act, 1963, or the Food Corporation of India established under Section 3, or a Board of Management established for two or more contiguous states under Section 16 of the Food Corporations Act, 1964, or [the Airports Authority of India constituted under Section 3 of the Airports Authority of India Act, 1994, or a Regional Rural Bank established under Section 3 of the Regional Rural banks Act, 1976, or the Export Credit and Guarantees Corporation Limited or the Industrial Reconstruction Bank of India Limited] ; or [the Banking Service Commission established under Section 3 of the Banking Service Commission Act, 1975, or] [an air transport service, or a banking or an insurance company, a mine, an oil-field], [a Cantonment Board], or a major port, the Central Government, and ii) in relation to any other Industrial Dispute, the State Government..
3. What is meant by Contractor
A A person who undertakes to produce a given result for the establishment, other than a mere supply of goods or articles of manufacture to such establishment, through contract labour or who supplies contract labour for any work of the establishment and includes a sub-contractor.
4. What is meant by Principal employer
A In respect of Government or Local Authority - Principal employer means head of the office or department or such other officer notified by the government or local Authority. In case of a factory €“ the owner or occupier or manager of the factory under the Factories Act. In case of a mine €“ the owner or agent named as the manager of the mine. In any other establishment any person responsible for the supervision and control of the establishment.
5. In which activities Contract labour is prohibited ? Contract Labour is prohibited in core activity.
6. What is core activity ?
A "Core Activity of an establishment" means any activity for which the establishment is set up and includes any activity which is essential or necessary to the core activity, but does not include €“ a) Sanitation works, including sweeping, cleaning, dusting, and collection and disposal of all kinds of waste. b) Watch and ward services including security service. c) Canteen and catering services. d) Loading and unloading operations e) Running of Hospitals, Educational and Training Institutions, Guest Houses, Clubs and the like where they are in the nature of support services of an Establishment. f) Courier Services which are in nature of support services of an Establishment. g) Civil and other constructional works, including maintenance. h) Gardening and maintenance of Lawns etc. i) House keeping and laundry services etc., where they are in nature support services of an Establishment. j) Transport services including Ambulance Services; k) Any activity of intermittent in nature even if that constitutes a core-activity of an Establishment and l) Any other activity which is incidental to the core activity. Provided that the above activities by themselves are not the "Core Activities" of such establishment.
7. Is it permissible to deploy Contract labour even in Core activity under certain conditions ?
A €ƒ Yes. The principal employer may engage contract labour in any core activity if there is any sudden increase of volume of work in the core activity which needs to the accomplished in a specified time.
8. Is the Act applicable in Government Departments and Local bodies ?
A Yes. The act applies to every establishment employing 5 or more contract workers. Establishment means any office or department of the Government or a local authority or any place where any trade, industry, business, manufacture or occupation is carried out.
9. Which Organisation comes under the purview of the Act ?
A The act applies to every establishment employing 5 or more contract workers. Establishment means any office or department of the Government or a local authority or any place where any trade, industry, business, manufacture or occupation is carried out.
10. How to get registration by the Principal employer ?
A Every employer shall submit the application in Form I in triplicate to the registering officer by paying the fees prescribed.
11. What is the effect of non-registration of Establishment ?
A If the principal employer engages the contractors workmen without registration of his establishment he is liable for action under section 23 of the Act.
12. How to obtain license ?
A Every contractor shall make an application to the licencing officer in From IV along with the Form V given by the principal employer by paying the fees prescribed and also by paying the security deposit as prescribed by the Government under Rule 24 and 26 of the AP Contract Labour Rules,
13. When the license is to be renewed ?
A Renewal shall be made not less than 30 days before the date on which the license expires.
14. What are the amenities to be provided to the Contract Labour?
A Sufficient supply of wholesome drinking water, sufficient number of latrines and urinals, washing facilities and first aid facilities, rest rooms and canteens.
15. What is the liability of Principal employer, if Contractor fails to provide amenity ?
A Principal employer is liable to provide amenities.
16. What is the responsibility of the Principal employer for less payments to the Contract Labour ?
A Principal employer shall ensure payment of wages to the workmen as per the law and if contractor fails the principal employer is liable to pay the wages.
17. What are the registers and records to be maintained by the Contractor?
A i) Maintain a Muster roll and register of wages inform XVI and Form, XVII respectively; Provided that a combined Register of Wags-cum-Muster Roll in Form XVIII shall be maintained by the Contractor where the wage period is a fortnight or less. ii) maintain a Register of Deductions for damage or loss, Register of Fine and Register of Advances inform XX, Form XXI and Form XXII, respectively; iii) maintain Register of overtime in Form XXIII recording therein the number of hours of, and wages paid for overtime work, if any.
18. What the Registers and records to be maintained by the principal employer ?
A Every principal employer shall maintain in respect of each registered establishment a register of contractors in Form XII.
19. Whether Contract labour is entitled for the wages prescribed under Minimum Wages Act or wages notified by the Commissioner of Labour.?
A Contract Labour are entitled to minimum wages if they are employed in a schedule employment. They are entitled to wages notified by the commissioner of labour under Contract Labour Act if they are employed in non-schedule employments.
20. Is it necessary that the license should be displayed, if so, where?
A The Contract Labour (Regulation and Abolition) Cent¬ral Rules as amended on 11thAugust, 1987 provide that a copy of the license shall be displayed prominently at the premises where the contract work is being carried out.
21. Is a contractor bound to look after the welfare of his workers?
A Yes. The Contract Labour (Regulation and Abolition) Act stipulates that a contractor will have to provide canteens, rest rooms, latrines, urinals, washing facilities, water, first aid box for the contract labour. In addition to this, a contractor is required to make prompt payment to his labour.
22. WORKMAN- UNDER THE ACT Who is a 'workman' under the Act?
A A 'workman' has been defined under Section 2(i) which means any person employed in or in connection with the work of any establishment to do any skilled, semi-skilled or unskilled manual, supervisory, technical or clerical work for hire or reward, whether the terms of employment be express or implied, but does not include any such person. (a) Who is employed mainly in a managerial or administrative capacity; or (b) Who being employed in a supervisory capacity draws wages more than five hundred rupees per month or exercises, either by the nature of the duties attached to the office or by reason of the powers versed in him, functions ,mainly of a managerial nature; or (c) Who is an out-worker, that is to say, a person to whom any articles and materials are given but by or on behalf of the principal employer to be made up cleaned, washed, altered, ornamented, finished, repaired, adapted or otherwise processed for sale for the purposes of the trade or business of the principal employer and the process is to be carried out either in the home of the outworker or in some other premises not being premises under the control and management of the Principal Employer. Obviously, this means that the Contract Labour is en¬gaged by a contractor who, controls the work performed by his work¬men, directs their work wherever necessary, pay them for the work and has the right to discharge them when no longer required. Evidently this implies that there exists employer-employee relation¬ship between the contract labour and the contractor.
23. How can it be determined whether a particular person is a contractor or not?
A A contractor, in relation to an establishment, means a person who undertakes to produce a given result for the establishment, other than a mere supply of goods or articles of such establishment, through contract labour or who supplies contract labour for any work of the establishment and includes a such-contractor. In other words, a person undertaking merely to transport manganese for the establishment will not fall within the meaning of 'contractor' Defined under section 2(1) (e) of the Contract Labour (Regulation and Abolition) Act.

1. Who is Workman / Employee ?
A Section 2 (1) (n) defines who is a workman and the section read with schedule II of the Act, wherein list of persons who, subject to the provisions of Section 2 (1) (n), are included in the definition of workman.
2. Who is an Employer ?
A "Employer" includes any body of persons whether incorporated or not and any managing agent of an employer and the legal representative of deceased employer, and, when the services of a workman are temporarily lent or let on hire to another person by the person with whom the workman has entered into a contract of service or apprenticeship, means such other person while the workman is working for him; "managing agent" means any person appointed or acting as the representative of another person for the purpose of carrying on such other person's trade or business, but does not include an individual manager subordinate to an employer;
3. What is Employer's liability for compensation ?
A Chapter II of the W.C. Act, deals with this issue. (1) If personal injury is caused to a workman by accident arising out of and in the course of his employment, his employer shall be liable to pay compensation in accordance with the provisions of this Chapter. PROVIDED that the employer shall not be so liable:- a) in respect of any injury which does not result in the total or partial disablement of the workman for a period exceeding (three) days; b) in respect of any (injury, not resulting in death, [or permanent total disablement] caused by] an accident which is directly attributable to--- the workman having been at the time thereof under the influence of drink or drugs, or the willful disobedience of the workman to an order expressly given, or to a rule expressly framed, for the purpose of securing the safety or workmen, or the willful removal or disregard by the workman of any safety guard or other device he knew to have been provided for the purpose of securing the safety or workman. Nothing herein contained shall be deemed to confer any right to compensation on a workman in respect of any injury if he has instituted in a Civil Court a suit for damages in respect of the injury against the employer or any other person; and no suit for damages shall be maintainable by a workman in any court of law in respect of any injury€” (a) if he has instituted a claim to compensation in respect of the injury before a Commissioner; or (b) if an agreement has been come to between the workman and his employer providing for the payment of compensation in respect of the injury in accordance with the provisions of this Act.
4. What is fatal accident and non-fatal accident ?
A (i) Fatal accident is one that results in the death of the workman. (ii) Non-fatal accident is one that causes injury to the workman resulting in partial or permanent physical disablement by which he loses his earning capacity.
5. When / Where claim application is to be filed ?
A In case of fatal accident the dependents of the deceased workman are entitled to file a claim application before the Commissioner for Workmen's Compensation Act. In case of non-fatal accident the injured worker who suffered partial or permanent disablement and lost his earning capacity can file an application under the Act. The applicants shall file the claim before the Commissioner for Workmen's Compensation of the area in which€” the accident took place which resulted in the injury; or the workman or in case of his death, the dependent claiming the compensation ordinarily resides; or the employer has his registered office:
6. Whether application can be made to the Central Labour Department ?
A No. The applications can be made to the Commissioners for Workmen's Compensation as notified by the State Government as required under the Act. No official of Central Labour Department is notified as Commissioner for Workmen's Compensation.
7. What is the wage limit prescribed under the Act ?
A The wages drawn by the injured or deceased workman shall not exceed Rs.4,000/- per month. However if the workman draws morethan Rs.4,000/- per month the amount of compensation shall be taken limiting the monthly salary as Rs.4,000/-
8. What is limitation period to file an application ?
A A claim application shall be filed within two years from the date of accident. However, the C.W.C. may entertain the application after limitation period by condoning the delay after hearing the parties.
9. Who are the opposite parties to the claim ?
A The employer of the workman is the Opp. Party in any claim application. In case the employer has obtained an Insurance Policy covering the risk of workman, such insurer may be made as 2nd Opp. Party.
4%. Whether an agreement can be made between Workman and Employer ?
A Yes, only in non-fatal cases and such agreements shall be registered with the Commissioner by the parties as per Section 28 of the Act. In case a memorandum of any agreement the registration of which is required by section 28, is not sent to the Commissioner as required by that Section, the employer shall be liable to pay the full amount of compensation which he is liable to pay under the provisions of the Act, and notwithstanding anything contained in the provision to sub-section (1) of section 4, shall not, unless the Commissioner otherwise directs, be entitled to deduct more than half of any amount paid to the workman by way of compensation whether under the agreement or otherwise.
11. Who are the dependents of the deceased workman ?
A "dependent" means any of the following relatives of a deceased workman, namely:- a widow, a minor [legitimate or adopted] son, and unmarried [legitimate or adopted] daughter, or a widowed mother; and if wholly dependent on the earnings of the workman at the time of his death, a son or a daughter who has attained the age of 18 years and who is infirm; if wholly or in part dependent on the earnings of the workman at the time of his death, a widower, a parent other than a widowed mother, a minor illegitimate son, an unmarried illegitimate daughter or a daughter [legitimate or illegitimate or adopted] if married and minor or if widowed and minor, a minor brother or an unmarried sister or a widowed sister if a minor, a widowed daughter-in-law, a minor child of a pre-deceased son, a minor child of a pre-deceased daughter where no parent of the child is alive, or a paternal grandparent if no parent of the workman is alive;]
12. What is the responsibility of the Employer on the occurrence of the accident ?
A Where an accident occurred in the premises of an employer, which results in death or serious bodily injury the employer shall send a report to the Commissioner giving the circumstances,
13. Whether a shop employee covered by the Act ?
A Yes. Though the schedule of the W.C.Act does not cover the Shop Employee, the A.P. Shops & Estts. Act provides for applicability of W.C.Act, 1923 in case of accidental injuries / death of workman.
14. What is amount of Compensation ?
A (1) Subject to the provisions of this Act, the amount of compensation shall be as follows, namely:- Where death results from the injury an amount equal to [fifty percent] of the monthly wages of the deceased workman multiplied by the relevant factor; or an amount of [eighty thousand rupees], whichever is more; Where permanent total disablement results from the injury an amount equal to [sixty percent] of the monthly wages of the injured workman multiplied by the relevant factor; or an amount of [ninety thousand rupees], whichever is more. Where permanent partial disablement results from the injury in the case of an injury specified in Part-II of Schedule-I, such percentage of the compensation which would have been payable in the case of permanent total disablement as is specified therein as being the percentage of the loss of earning capacity caused by that injury; and in the case of an injury not specified in Schedule €“ I, such percentage of the compensation payable in the case of permanent total disablement as is proportionate to the loss of earning capacity (as assessed by the qualified medical practitioner) permanently caused by the injury;
15. Where appeal lies ?
A The appeal lies with the High Court on the order of the Commissioner for Workmen's Compensation.
16. Whether an employee covered under ESI can file a claim application under W.C.Act ?
A No.

1. To whom the Act is applicable ?
A (a) The Act applies to persons engaged in scheduled employments or in specified class of work in respect of which minimum wages have been fixed. (b) No employee can give up by contract or agreement his rights in so far as it purports to reduce the minimum rates of wages fixed under the Act. As such, any contract or agreement made less than the minimum rates of wages fixed shall be null and void.
2. What is wage as defined under the Act ?
A €œWages€ means all remuneration capable of being expressed in terms of money which would if the terms of the Contract of employment express or implied, were fulfilled, be payable to a person employed in respect of his employment or of work done in such employment which does not include other allowances viz. i) the value of€” a) any house-accommodation, supply of light, water, medical attendance: or b) any other amenity or any service excluded by general or special order of the appropriate Government: i) any contribution paid by the employer to any Pension Fund or Provident Fund or under any scheme of social insurance: ii) any traveling allowance or the value of any traveling concession: iii) any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment; or iv) any gratuity payable on discharge.
3. What is Minimum Wage ?
A Wages fixed or revised by the Government in respect of scheduled employments from time to time which consists of Basic wage + variable dearness allowance.
4. What is V.D.A ?
A €œCost of living index number€ in relation to employees in any scheduled employment in respect of which minimum rates of wages have been fixed, means the index number ascertained and declared by the competent authority by notification in Official Gazette to be the cost of living index number applicable to employees in such employment:
5. Who are Inspectors under Minimum Wages Act ?
A The Officers from the rank of Asst. Labour Officers, Asst. Commissioners of Labour, Dy. Commissioners of Labour, etc. are Inspectors under the said Act.
6. Who are the Authorities under M.W.Act ?
A The Authorities and claim amount is mentioned below:-
ACL : Claims not exceeding Rs.50,000/-
DCL : Claims above Rs.50,000/- and not exceeding Rs.2,00,000/-
JCL : Claims above Rs.2,00,000/-
7. Who can file claims ?
A Claims can be filed by Inspectors before the Authorities concerned in the prescribed format. Any individual employee or Trade Union can also file claims before the concerned authorities in the prescribed format.
8. Whether any appeal lies in M.W. claims ?
A No appeals lie in any Court. However, aggrieved party may approach the Hon€™ble High Court of the Telangana Chapter under writ jurisdiction.
9. What are the hours of work in a day ?
A The no.of hours which shall constitute to normal working day in case of an adult, nine hours including lunch break of one hour. The employer shall allow a day of rest after six days of work with wages to the employees every week. If the employer extract work for more than four hours and less than eight hours the employer has to pay full day wages.
10. When the workman is entitled for overtime wages ?
A Any employee on any day having worked excess of No.of hours prescribed, is entitled to over time at double the wage except in agriculture wherein it is 1 ½ times of the wage.
11. How is Minimum Wage rate fixed in India ?
A Under Section 5 of Minimum Wages Act, 1948 there are basically two method of fixation/revision of Minimum Wages (1) Committee Method (2) Notification Method. Revision of Minimum Wages should not exceed an interval of 5 years. Section 3 empowers appropriate Government to fix the minimum rates of wages in the scheduled employments. Minimum rate of the wages fixed or revised consists of the following: A basic rate of wages and a special allowance, viz., cost of living allowance; A basic rate of wages with or without cost of living allowance and cash value of concessions for supplies of essential commodities; An all inclusive rate, i.e. basic rate, cost of living allowance and cash value of concessions. The Minimum Wage rate may be fixed at a) time rate, b) piece rate, c) guaranteed time rate and d) overtime rate. The Act provides that different Minimum Wage rate may be fixed for a) different scheduled employments, b) different works in the same employment, c) adult, adolescent and children, d) different locations or e) male and female. Also, Government may fix such Minimum Wage by a) an hour, b) day, c) month, or d) any other period as may be prescribed by the notified authority. Norms for fixing Minimum Wage: Three consumption units per earner, Minimum food requirement of 2700 calories per average Indian adult, Cloth requirement of 72 yards per annum per family, Rent corresponding to the minimum area provided under the Government's Industrial Housing Scheme and Fuel, lighting and other miscellaneous items of expenditure to constitute 20 % of the total Minimum Wages Children education, medical requirement, minimum recreation including festivals/ceremonies and provision for old age, marriage etc. should further constitute 25% of the total Minimum Wage. Cost of Living Allowance: The Minimum basic wages fixed are linked to consumer price index as a counter measure against inflation. The cost of living is set twice in a year. The Commissioner of Labour notifies the rate 1st of April and 1st of October. The rates are fixed on the basis of the average rise in the State industrial workers consumer price index numbers for half year ending December and June respectively. Variable Dearness Allowance: Dearness Allowance is payable to monthly, daily and piece rate earners. Every six months the respective State Governments issues the Cost of Living Index number for each and every scheduled employment.
12. What are the duties of employer under Minimum Wages Act, 1948 ?
A The employer must pay every employee wages as fixed by the Government. (a) Wages must be paid in cash (current coins or currency notes, or both)/ after obtaining the authorization, it can even be paid either by cheque or by crediting the wages in employee€™s bank account. (b) For the fixation of Minimum Wages, the employment must have been in Schedule originally or added to the Schedule by a notification under Section 27 of the Act.< (c) The employer can take actual work on any day up to 9 hours in a 12 hours shift, but he must pay double the rate for any hour or part of an hour of actual work in excess of 9 hours or for more than 48 hours in any week. (d) Once a Minimum Wage is fixed according to the provisions of the Act, the employer must pay to every employee engaged in a Scheduled employment, Minimum Wages notification for that class of employees. (e) The employer should fix wage-period for the payment of wages at intervals not exceeding one month or such other larger period as may be prescribed. (f) Where less than 1000 persons are employed, it would be paid before the expiry of the 7th day of the following month. And where more than 1000 workers, it would be paid before the expiry of the 10th day of the following month. (g) The employer should pay the wages to a person discharged not later than the second working day after his discharge. (h) Every employer should maintain a register of wages at workplace specifying the following particulars for each wage period in respect of each employed person: i. Minimum rate of wages payable; ii. The number of days in which overtime was worked; iii. The gross wages; iv. The wages actually paid and the date of payment. :4: (i) Every employer should get the signature or the thumb impression of every person employed on the wage book and the wage slips. (j) The employer should exhibit at main entrance to the establishment and its offices, a notice in respect of the following in English and local language: i. Minimum rate of Wages; ii. Abstracts of the Acts and rules made there under; iii. Name and address of the Labour Inspector/ Asst. Commissioner of Labour etc.
13. What is Variable Dearness Allowance ?
A It was recommended in the Labour Ministers' Conference held in 1988, to evolve a mechanism to protect wages against inflation by linking it to rise in the Consumer Price Index. The Variable Dearness Allowance came into being in the year 1991. The allowance is revised twice a year, once on 1st April and then on 1st October. In the State Sphere, 26 States/Union Territories have provisions for Variable Dearness Allowance, at present.

1. What is Bonus ?
A The object of the Payment of Bonus Act is to provide for the payment of bonus (linked with profit or productivity) to employees.
2. To whom does the Bonus act apply ?
A The Payment of Bonus Act extends to the whole of India and is applicable to every factory and to every establishment wherein 20 or more workers are employed on any day during an accounting year. The Central/State Government can however, extend its provisions to any establishment employing less than 20 but more than 4% employees. For the purpose of calculating the number of employees for applicability of the Act, part-time employees are also included. Every employee not drawing more than Rs.10000 per month who has worked for not less than 30 days in an accounting year, shall be eligible for bonus. Any establishment which has been covered under the Act once shall continue to be governed by the Act even if the number of persons employed therein at any time falls below 20.
3. If the number of employees working in an establishment becomes less than 20, will the Act apply?
A Yes, the act will continue to apply once it has become applicable.
4. Do new establishments have to pay bonus ?
A A newly set up establishment is exempted from paying bonus to its employees in the first five years following the year in which the employer sells the goods produced or manufactured by him. If, however, the employer derives profit in any of the first five year, he has to pay bonus for that year. The provisions of set on and set off are not applicable in such cases.
5. Can an establishment be deemed to be newly set in case of a change in ownership ?
A Even if ownership of an establishment is transferred, the establishment remains the same and it cannot be said to be a new establishment for the purpose of Bonus applicability.
6. If a management has a number of departments, undertakings or branches, should they be treated as separate establishments or as one composite establishment?
A If an establishment consists of different departments or undertakings or has branches, whether situated in the same place or in different places, unless a separate balance-sheet and profit and loss account are prepared and maintained in respect of them, all such departments of undertakings or branches should be treated as parts of the same establishment for the purpose of computation of bonus, and once they are treated as parts of the same establishment, they should be continued to be treated as such.
7. What component of wages are used to calculate Bonus ?
A Salary is defined as Basic Wage + DA and does not include allowances. Salary is capped at Rs 3500 for the purposes of bonus calculation.
8. What is the minimum bonus prescribed by the Act?
A The minimum bonus prescribed by the Act is 8.33 % of annual basic salary, which is equivalent to one months basic salary or Rs. 100 whichever is higher.
9. What is the maximum bonus payable under the Act?
A The maximum bonus payable under the Act is 20 % of annual basic salary or two and a half months basic salary. Basic salary is capped at Rs 3500 for the purposes of bonus calculation, so maximum bonus payable is Rs 8,400 (20% of Rs 42000 i.e. Rs 3500*12 month).
4%. What is the meaning of "available surplus" and "allocable surplus"
A Bonus payable under the Act is linked with profits. The employer has to calculate "gross profits" of his establishment in the manner specified in section 4. Then from "gross profits" so calculated he has to deduct the sums referred to in section 6. The balance is called "available surplus". A percentage of the available surplus calculated in accordance with the provisions of sub-section (4) of section 2 is called "allocable surplus". Where, in respect of any year the allocable surplus exceeds the amount of minimum bonus payable to the employees, the employer must pay to every employee in respect of that year bonus in proportion to the salary or wage earned by the employee during the year subject to a maximum of twenty percent of such salary or wage. (Subsection 2(4), 4 , 5, 6 and amp; 11).
11. What is the principle of set on and set off of allocable surplus?
A The principle of set on and set off of allocable surplus is as follows: Where for any year the allocable surplus exceeds the amount of maximum bonus payable to the employees, then, the excess shall, subject to a limit of twenty percent of the total salary or wages of the employees, be carried forward for being set on in the succeeding year and so on to be utilized for the purpose of payment of bonus. Where for any year there is no available surplus, or the allocable surplus in respect of that year falls short of the amount of minimum bonus payable to the employees, and there is no amount or sufficient amount carried forward and set on which could be utilized for the purpose of payment of the minimum bonus, then, such minimum amount or the deficiency, as the case may be, shall be carried forward for being set off in the succeeding year and so on.
12. Can an employer pay bonus based on production or productivity?:
A Bonus linked with production or productivity can be paid instead of bonus based on profits, if there is an agreement to that effect, but subject to the provisions of the Act in respect of payment of minimum and maximum basis.
13. Which employees are eligible for Bonus under the Act ?
A All employees drawing a salary or wages up to Rs. 4%,000 per month and who has worked for a minimum period of 30 days in a year is entitled to bonus. Salary is defined as Basic Wage + DA and does not include allowances.
14. Can an employee be held ineligible for payment of Bonus under the Act on the ground that he is a managerial employee?
A Any person came within the definition of employee by virtue of drawing salary falling within the limit prescribed would be eligible for payment of bonus under the Act regardless of responsibilities.
15. Bonus must be paid within a period of 8 months from the close of the accounting year. In case there is a dispute regarding bonus, bonus must be paid within 30 days of settlement of the dispute.
16. Can an employer hold or deduct the bonus payable to an employee.
A Any customary or festival bonus paid in advance to employees can be deducted from their bonus amount. Bonus can be held in cases of misconduct causing financial loss to the company.

1. What is gratuity ?
A Gratuity is a lump sum amount that employer pays you when you retire or resign from the organization. An Employee does not contribute any portion of his salary towards this amount. Gratuity is paid out at the time of superannuation (if you retire at the age of 58), when you retire (at any other age) or resignation, and in the event of your death or being rendered disable because of an accident or illness. In the event of your death, the gratuity will be paid to your nominee.
2. To whom does the Gratuity act apply ?
A The Payment of Gratuity Act extends to the whole of India and is applicable to all factories, mines, oilfields, plantations, ports, railway companies and any establishments where 4% or more persons were employed on any day of the preceding 12 months and every Shop and Establishment of that State, in which 4% or more persons are employed, or were employed on any day in the preceding 12 months. Every employee irrespective of his wages is entitled to receive gratuity if he has rendered continuous service of 5 years or more than 5 years.
3. When does an employee become eligible for gratuity?
A Gratuity is applicable to a permanent employee who completes 5 years of continuous service with the organisation. After the ruling of Madras High Court an employee is deemed to have completed 5 years if he has completed 240 days of service in the 5th year.
4. What is 'continuous service' ?
A An employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service and includes service which may be interrupted on account of sickness, accident, leave, absence from duty without leave, lay off, strike or a lock-out or cessation of work not due to any fault of the employee, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act. Where an employee is not in continuous service for any period of one year or six months, he shall be deemed to be in continuous service under the employer
5. Can an employee claim Gratuity even before completion of 5 years?
A Yes, An employee or nominees can claim gratuity even before completion of 5 years in the cases of death or disablement.
6. When does an employee forfeit gratuity ?
A If the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or if the service of such employee have been terminated for any act which constitutes an offense involving moral turpitude, provided that such offense is committed by him in the course of his employment.
7. What if an employee completes 4 years & 6 months of service, is he eligible for Gratuity?
A No, but where an employee has completed 4 years & 240 days of continuous service in the 5th year, then he is eligible.
8. What if an employee expires before completing 5 years of continuous service?
A In case the employee expires before completing 5 years, gratuity should be paid to the nominee of the deceased employee provided the employee has completed a year of service.
9. Does a company have to insure itself against its gratuity liability?
A Every employer other than an employer of an establishment belonging to, or under the control of, the Central Government or a State Government, shall subject to provisions of sub section (2) under section 4A of the Act, obtain an insurance in the manner prescribed under sub-section (4) of section 4A of the Act for his liability for payment towards the gratuity under this Act, from the Life Insurance Corporation of India or any other Insurance Company incorporated under the Company's Act, 1950
10. Is a retrenched employee entitled to gratuity?
A Yes, a retrenched employee is also entitled to gratuity.
11. Which form has to be filled for nomination of Gratuity?
A Form F has to be filled for Nomination of Gratuity.
12. Who can be nominated for Gratuity?
A If employee is married then the spouse can be nominated, if not then dependant parents.
13. If an employee does not have dependant parents or is not married, can he/she nominate his/her brother or sister?
A Yes, immediate family can be nominated, but nomination needs to be changed when the employee acquires a family.
14. What is the formula to calculate Gratuity ?
A Last drawn salary x 15/26 x No. of years of service where last drawn salary comprises basic +DA. 15 = 15 days salary, 26 = number of days in a month for calculation of daily salary. Gratuity is restricted to a maximum of Rs 4%,00,000/-
15. Is gratuity exempted from Income Tax ?
A Death-cum-retirement gratuity received by employees of central or state governments and local authorities is exempted without limit. Gratuity received under the Payment of Gratuity Act, 1971 is exempted to the extent that it does not exceed 15 days salary for every completed year of service calculated on the last drawn salary subject to a maximum of Rs 4% lakh. Any other gratuity is exempted to the extent that it does not exceed one half-month salary€™s for each year of completed service calculated on the basis of average salary for 4% immediately preceding months subject to a maximum of Rs 4% lakh. The ceiling of Rs 4% lakh applies to the aggregate of gratuity received from one or more employers in the same or different years.
16. What is the maximum Gratuity payable to an employee?
A Maximum Gratuity payable to an employee is Ten Lakhs only.
17. Can a company refuse to pay gratuity due to financial or other reasons ?
A No, a company cannot avoid its gratuity liability under any circumstances.
18. By when should gratuity dues be paid ?
A Within 30 days of the employees date of leaving.

1. Who has to apply for Registration under Telangana SE, Act?
A Every employer and owner of a shop & establishment shall apply for employment of registration of his shops/Establishment irrespective of business any person within 30 days of commencement of his/her.
2. Whether the Registration certificate requires to be renewal if so at what intervals?
A Every registration certificate must be renewed before 30 days of expiry of the year i.e., by 1st December of every year.
3. What is the Mode of payment of fee ?
A Through mee-Seva centres
4. What are the obligations on the employer in implementation of the Act?
A a) Every employee must be allowed to avail weekly holiday for every period of seven days. b) No employee shall be allowed to work more than 8 hours in any day and 48 hours in a week without making payment of overtime wages. c) Every employee shall be issued letter of appointment in form No. XXVI and the employer shall maintain the registers mentioned overleaf, namely; 1) Register of Employment in form No. XXII. 2) Register of wages in form no. XXIII 3) Register of Leave in form no. XXV. 4) Register of Advance of Wage in form no. XII 5) Bound visit book and others as applicable. d) Every employer is required to furnish the information or document to the inspector notified under the Act on demand. e) No person who has not completed his 14 years of age shall be required or allowed to work in any Shop or Establishment. f) Special Provisions to Women Employees :- i) No women employee shall be required or allowed to work in any shop & establishment before 6:00 AM and after 8:30 PM. ii) Every women employee is entitled for paid leave for six weeks immediately proceeding the date of delivery and six weeks after the date of delivery. g) Leaves:- i. The Employee who has served for a period of 240 days or more is entitled for 15 days of leave with wages, 12 days casual leaves and 12 days sick leaves and such leave with wages may be accumulated up to a minimum of 60 days. ii. Every employer is responsible for payment of all wages and sums required to be paid under this Act and monthly wages shall be paid by 5th of every month. iii. No employer shall without a reasonable cause, terminate the services of an employee who has been in his employment continuously for a period of not less than 6 months without giving such employee at least one months notice. iv. Every termination of employment shall be made in writing before the appropriate authority. Every employee who has served in any establishment for a period of not less than one year shall subscribe to the insurance scheme or insurance saving scheme.
5. What are the rights and privileges of the employees under the Act ?
A a) Every employee is entitled to receive the wages for the period of work rendered. b) Every employee is entitled for 15 days leave with wages, 12 days casual leave and 12 days sick leave. c) Every employee is entitled for the overtime wages worked beyond the normal working hours i.e., 8 hours at the rate of double the average wages earned. d) Every employee is entitled weekly holiday with wages and also Notional/Festival Holidays notified from time to time. e) Any employee who has been in his employment continuously for the period of not less than one year, shall be eligible for service compensation @ 15 days of average wages of each year. f) Every employee is eligible for encashment of the leave with wages for a period of 8 days in every year. Every employee is entitled for a special casual leave for 6 days only once during his entire service, if he/she has undergone vasectomy or tubectomy operation on production of certificate.
6. What are the remedies available in the Act to get relief in certain cases like nonpayment of wages, deduction of wages, and nonpayment of service compensation?
A The Asst. commissioner of Labour concerned is the authority concerned to hear and decide the above matters as per the Section 50 of the A.P.S.E.Act.
7. What are the remedy when an employee is terminated illegally and relief of reinstatement is sought for?
A The Asst. commissioner of Labour concerned is the authority concerned to hear and decide the above matters as per the Section 48(1) of the A.P.S.E.Act.
8. Any appellate authority is available under the Act to make appeals on the orders of the authorities U/s 48 and 50 of the Act?
A Yes. a) The notified authority U/s 53 of the Act for making the appeals is Dy. Commissioner of Labour/Jt. Commissioner of Labour concerned. b) Appellate authority on the orders of the authority U/s 48(3) of the Act i.e., Dy. Commissioner of Labour/Jt. Commissioner of Labour concerned.


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Last Reviewed & Updated: 07 September 2018 06:12:46 PM
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