Maternity, Gratuity & Wages Acts — Set 10

Correct Answer: B. 67% of available surplus or 60% for foreign companies

Under the Payment of Bonus Act, 'allocable surplus' is defined as 67% of the available surplus in an accounting year in respect of employers other than banking companies, and 60% in respect of banking companies. The available surplus is calculated from the gross profit minus various deductions including depreciation, development rebate, and taxes. This is the amount from which bonus is paid to employees.

Correct Answer: B. If termination is for moral turpitude offense or property damage

The correct answer is If termination is for moral turpitude offense or property damage. Under Section 4(6)(b) of the Payment of Gratuity Act, gratuity shall be wholly or partly forfeited if the services of an employee are terminated for any act, wilful omission, or negligence causing damage or loss to or destruction of property belonging to the employer, or for riotous or disorderly conduct, or for any act constituting an offence involving moral turpitude. In all other termination cases, including for poor performance, the employee is entitled to gratuity. This topic is frequently tested in competitive examinations such as RRB NTPC, SSC, and UPSC.

Correct Answer: C. Imprisonment up to 6 months and/or fine up to Rs. 500

Under Section 22 of the Minimum Wages Act, any employer who pays wages at a rate less than the minimum wage prescribed, or contravenes any provision regarding hours of work, is liable to imprisonment for a term not exceeding six months or a fine not exceeding five hundred rupees or both. In case of repeated violations, the penalties may be more severe. This provision deters wage theft.

Correct Answer: B. Three schemes

The Employees' Provident Funds and Miscellaneous Provisions Act, 1952 covers three schemes: (1) Employees' Provident Fund Scheme 1952 (EPF), (2) Employees' Pension Scheme 1995 (EPS), and (3) Employees' Deposit-Linked Insurance Scheme 1976 (EDLI). These three schemes together provide for long-term savings, pension, and life insurance for formal sector workers. EPFO administers all three schemes.

Correct Answer: B. Arbitrary deductions and delay in wage payment

The Payment of Wages Act 1936 was primarily enacted to combat the rampant problem of employers making unauthorized deductions from wages and delaying wage payments to workers. Before this Act, workers were often subjected to arbitrary and excessive deductions and had no legal recourse. The Act established clear rules about what deductions are permissible and when wages must be paid. It was a landmark in labour rights in India.

Correct Answer: D. All establishments employing 10 or more persons

The correct answer is All establishments employing 10 or more persons. The Maternity Benefit Act, 1961 applies to every establishment being a factory, mine, or plantation, including any such establishment belonging to the Government, and to every establishment in which persons are employed to do work of an industrial character. After 2017 amendment, it also applies to any other establishment as notified by the Central or State Government, provided it employs 10 or more persons. This topic is frequently tested in competitive examinations such as RRB NTPC, SSC, and UPSC.

Correct Answer: C. Fine up to Rs. 10,000 or imprisonment up to 1 year or both

The correct answer is Fine up to Rs. 10,000 or imprisonment up to 1 year or both. Under Section 9 of the Payment of Gratuity Act, any employer who refuses to accept a notice or application for payment of gratuity, or fails to pay gratuity within the prescribed time, shall be punishable with imprisonment for a term not less than three months but not more than one year, or with fine not less than ten thousand rupees but not more than twenty thousand rupees, or with both. This ensures timely payment. This topic is frequently tested in competitive examinations such as RRB NTPC, SSC, and UPSC.

Correct Answer: C. 8 months

Under Section 19 of the Payment of Bonus Act, all amounts payable to employees by way of bonus shall be paid in cash by the employer within eight months of the close of the accounting year. If there is any dispute regarding bonus, the employer must pay the minimum bonus within the eight-month period and the balance, if any, after the dispute is resolved. This ensures workers receive their bonus in reasonable time.

Correct Answer: C. 1 month

Section 4 of the Payment of Wages Act provides that wages shall be paid at regular intervals not exceeding one month. If wages cannot be paid on account of reasons beyond control of the employer, they must be paid within 7 days from the close of the wage period for establishments employing 1000 or fewer workers, and within 10 days for larger establishments. The Act ensures regular and timely payment of wages.

Correct Answer: B. Any approved insurance company

Under Section 4-A of the Payment of Gratuity Act, every employer other than an employer who has established an approved gratuity fund shall obtain insurance for his liability for payment towards gratuity from the Life Insurance Corporation of India or any other prescribed insurer. Alternatively, the employer can establish an approved gratuity fund. The purpose is to ensure availability of funds when gratuity falls due.