Background
The Code on Wages, 2019 was enacted to consolidate and rationalize India’s wage-related labour laws by subsuming the Payment of Wages Act, Minimum Wages Act, Payment of Bonus Act and Equal Remuneration Act into a single unified framework, with the objective of ensuring uniform wage standards, timely payment of wages and elimination of wage discrimination. In line with the central legislation, the Government of Gujarat notified the Code on Wages (Gujarat) Rules, 2021, which lay down the procedural and administrative mechanisms for implementing the Code within the state, replacing earlier wage-related rules and streamlining employer compliance.
Applicability
Compliance Requirements under the Rules in Accordance with the Code
Payment of Bonus to Employees (Section 26, 39 | Rule 22–28 of the Code on Wages (Central) Rules, 2026)
Every employer shall pay statutory bonus to eligible employees within eight months from the end of the financial year. The bonus shall be a minimum of 8.33% of wages or ₹100, whichever is higher — payable irrespective of profit or loss — and may extend up to 20% of wages where the available surplus permits. Any additional bonus demand based on production or productivity shall be agreed between the employer and employees, but the total bonus in any case cannot exceed 20% of annual wages. Bonus shall be reduced proportionately if the employee has not worked on all working days. The bonus shall be paid out of the allocable surplus, being 60% of the available surplus in the case of a banking company and 67% in the case of any other establishment. For new establishments: during the first five years, bonus is payable only if the establishment makes a profit, calculated without Section 36; in the sixth and seventh years, specific modifications to Section 36 apply; and from the eighth year, Section 36 applies as usual.
Penalty & Punishment
U/s 54: Contravenes any other provision of this Code or any rule made or order made or issued thereunder shall be punishable with fine which may extend to Rs.20000.
If again found guilty of similar offence under this clause, within 5 years from the date of the commission of the first or subsequent offence, he shall, on the second and the subsequent commission of the offence under this clause, be punishable with imprisonment for a term which may extend to one month or with fine which may extend to Rs.40000/-, or with both.
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