Section 28: Computation of number of working days

Overview

This section of the Code on Wages, 2019, deals with the calculation of ‘working days’ which is crucial for determining bonus eligibility for employees. It clarifies which days are counted as working days, even if the employee wasn’t physically present at work, ensuring fair bonus calculations.

Scope and Coverage

• This section applies to all employees covered under the Code on Wages, 2019, who are eligible for bonus as per the provisions of the Payment of Bonus Act, 1965 (as amended and incorporated into the Code).
• It applies to all establishments covered under the Code, regardless of size or sector, as long as they employ eligible workers.
• There are no specific thresholds for the application of this section; it applies to all bonus-eligible employees.

Key Obligations and Rights

• Employer’s Duty: Employers are obligated to accurately compute the number of working days as defined in Section 28 when calculating bonus amounts. This includes considering days of layoff, leave with wages, and temporary disablement.
• Employee’s Right: Employees have the right to have their working days correctly calculated for bonus purposes. They can raise concerns with their employer if they believe the calculation is inaccurate.
• Inclusion of Specific Days: The section clarifies that certain days, even without actual work, must be included in the calculation of working days, protecting employee rights.

Compliance and Penalties

Incorrect computation of working days for bonus calculation is a violation of the Code on Wages, 2019. This can lead to inspections by Labour Authorities. If a violation is found, the employer may face penalties, including fines and potential legal action. Repeated or serious violations could result in more severe consequences.

Practical Examples

• Example 1: Ramesh worked for 240 days in a year. He was on leave with wages for 10 days and was temporarily disabled due to an accident for 15 days. According to Section 28, his total working days for bonus calculation would be 240 + 10 + 15 = 265 days.
• Example 2: Priya was laid off for 30 days due to a company slowdown. She still receives her wages during the layoff period. Her working days for bonus calculation would include these 30 layoff days, ensuring she isn’t penalized for circumstances beyond her control.