May 12, 2021

The Payment of Bonus Act, 1965 is the ultimate act for the payment of bonuses to the employees, which was built with the aim of rewarding employees for their good work done for the organization. It is a step ahead to share the accomplishment of the establishment, reflected by the profits earned by the contributions and made by capital, management, and labor with the workers. The objective of this act is as follows.

  1. To improve legal responsibility to pay a bonus [reward for good work] in the state of profits or losses.
  2. To derive direct formula for determining bonuses.
  3. To guide the Minimum & Maximum rate bonus.
  4. To grant set-off/set-on to the mechanism.
  5. To administer a redressal mechanism.

As per section 27 of the payment of Bonus Act, 1965, The Government may, by notification in the Official Gazette, appoint such persons as it deems fit to be Inspectors for the purpose of this Act and may determine the limits within which they shall exercise authority.

Powers of the inspector are defined as follows.

  • Inspector can any reasonable time invade the premises and investigate or inspect the records, accounts, books, registers, and any other documents.
  • The employer is holding a duty to provide any information demanded by the inspector.

Now, as per section 27 of the payment of Bonus Act, 1965.

  1. The suitable Government may, by an announcement in the Official Gazette, designate such person as it thinks fit to be Inspectors for the objectives of this Act and may define the boundaries within which they shall exercise authority.
  2. An inspector designated under sub-section (1) may, to determine whether any of the terms of this Act have been complied with-
  1. require an employer to provide such data as he may consider essential;
  2. at any sensible time and with such assistance, if any, as he believes fit, enter any establishment or any assumptions connected therewith and require anyone found in charge thereof to present before him for review any accounts, books, registers, and other documents correlating to the employment of persons or the pay of salary or wage or bonus in the establishment;
  3. examine for any matter connected to any of the objects above-mentioned, the employer, his agent or servant or any other person found in charge of the establishment or any assumptions connected therewith or any person whom the inspector has understandable cause to believe to be or to have been an employee in the establishment;
  4. make copies of, or take extracts from, any book, register or other document affirmed concerning the establishment;
  5. Exercise such other powers as may be appointed.

    3. Every inspector shall be deemed to be a public servant within the meaning of the Indian penal Code (45 of 1860).

   4. Any person required to compose any accounts, book, register or other documents or give report by an inspector under sub-section (1) shall be lawfully obliged to do so.

These are the powers of inspectors under payment of bonus act, 1965.