The Code on Wages, 2019
Section 39. Time limit for payment of bonus
In simple words
- Bonus must be credited to the employee’s bank account within eight months of the close of the accounting year s. 39(1).
- On the employer’s application, the appropriate Government may extend that period, but not beyond two years in total s. 39(1), proviso.
- Where the Central Government is the appropriate Government, the Chief Labour Commissioner (Central) exercises this power for the whole of India S.O. 2457(E).
- Where a bonus dispute is pending, bonus is due within one month of the award becoming enforceable or the settlement coming into operation; if the dispute is about a higher rate, eight and one-third per cent must still be paid within eight months s. 39(2).
An explanation, not the law. The official text below prevails.
Official text
(1) All amounts payable to an employee by way of bonus under this Code shall be paid by crediting it in the bank account of the employee by his employer within a period of eight months from the close of the accounting year:
Provided that the appropriate Government or such authority as the appropriate Government may specify in this behalf may, upon an application made to it by the employer and for sufficient reasons, by order, extend the said period of eight months to such further period or periods as it thinks fit; so, however, that the total period so extended shall not in any case exceed two years.
(2) Notwithstanding anything contained in sub-section (1), where there is a dispute regarding payment of bonus pending before any authority, such bonus shall be paid, within a period of one month from the date on which the award becomes enforceable or the settlement comes into operation, in respect of such dispute:
Provided that if, there is a dispute for payment at the higher rate, the employer shall pay eight and one-third per cent. of the wages earned by the employee as per the provisions of this Code within a period of eight months from the close of the accounting year.