EPFO APFC 2023 General Studies · Question 97 of 120

Correct — D, (d) ₹ 10,800. Work through the Act in the order its sections come and the arithmetic is a single line at the end. First, is the employee covered? Section 2(13) defines an employee for this Act as a person drawing a salary or wage not exceeding ₹ 21,000 per month, so a person on ₹ 9,000 is within the definition; and section 8 makes an employee eligible for bonus if he has worked in the establishment for not less than thirty working days in the accounting year, which a person who has worked continuously for the whole year plainly has. The stem also states that he is eligible, so this step only confirms it. Second, on what figure is the bonus to be computed? That is section 12, and it is the whole of the question. Section 12 provides that where the salary or wage of an employee exceeds ₹ 7,000 or the minimum wage for the scheduled employment as fixed by the appropriate Government, whichever is higher, per month, the bonus shall be calculated as if his salary or wage were ₹ 7,000 or that minimum wage, whichever is higher. The stem is written with care: the ₹ 9,000 this employee draws is the wage 'as fixed under the Minimum Wages Act, 1948', so it is the minimum wage for his scheduled employment. The higher of ₹ 7,000 and ₹ 9,000 is ₹ 9,000, and his actual wage does not exceed that figure, so the capping in section 12 does not bite at all and the bonus is computed on his real wage. Even if the section is applied mechanically, the notional figure it substitutes is also ₹ 9,000, so the two routes give the same base. Third, the arithmetic. The annual wage is ₹ 9,000 multiplied by twelve, that is ₹ 1,08,000, and bonus at the stated rate of ten per cent is ₹ 10,800. That rate is itself consistent with the Act, since section 10 fixes a minimum bonus of 8·33 per cent and section 11 a maximum of twenty per cent, and ten per cent lies between them.

• (a)₹ 7,000 — This is the calculation ceiling itself, reproduced as though it were the bonus. ₹ 7,000 is the monthly figure that section 12 mentions, and a candidate who has learnt the section as 'the bonus is worked out on ₹ 7,000' rather than as a rule about the base can write it down as an amount of money without noticing that it is a monthly wage and not an annual bonus. Two checks would have caught it. The first is dimensional: the question asks for a bonus for a whole accounting year, so any answer that equals a monthly figure should be suspected at once. The second is arithmetical: ten per cent of anything in this problem is either ₹ 8,400 or ₹ 10,800, and ₹ 7,000 is neither. The general discipline is to finish the calculation rather than to stop at the figure the section names, because the sections of this Act supply bases and percentages, not answers.
• (b)₹ 8,400 — This is the answer a candidate reaches by applying the ₹ 7,000 ceiling and ignoring the words that follow it. Ten per cent of ₹ 7,000 multiplied by twelve is ₹ 8,400, and that would be the right answer if section 12 said simply that bonus is calculated as if the salary were ₹ 7,000. It does not. Since the amendment that came into effect from 1 April 2014, the section reads 'seven thousand rupees or the minimum wage for the scheduled employment, as fixed by the appropriate Government, whichever is higher', and the same amendment raised the eligibility ceiling in section 2(13) from ₹ 10,000 to ₹ 21,000. The stem has been drafted to test exactly this clause: it does not merely say the employee draws ₹ 9,000, it says he draws ₹ 9,000 as fixed under the Minimum Wages Act, 1948, which identifies that sum as the minimum wage for his scheduled employment and makes it the higher of the two figures. This option is the trap for the candidate carrying the pre-amendment rule, and it is the option most likely to be marked by someone who has studied the Act but not its current text.
• (c)₹ 10,000 — No route through the Act produces this figure. Ten per cent of a year's wages at ₹ 9,000 a month is ₹ 10,800, and ten per cent at the ₹ 7,000 ceiling is ₹ 8,400; the statutory minimum bonus of 8·33 per cent on ₹ 1,08,000 would be about ₹ 8,997, and the statutory maximum of twenty per cent would be ₹ 21,600. ₹ 10,000 is none of these. It is a round number placed close enough to the correct answer to catch a candidate who computes approximately, treating the annual wage as roughly a lakh and taking a tenth of it. Bonus calculations under this Act are exact and reward exactness: the base is a defined monthly figure, the multiplier is twelve, and the rate is given, so there is never an occasion to round. Where an option set contains one conspicuously round number among precise ones, that option is usually there to absorb approximation.

The Payment of Bonus Act, 1965 makes the payment of an annual bonus a statutory obligation rather than a matter of the employer's generosity, and its scheme runs through a small number of sections that repay being learnt in order. It applies to every factory and to every other establishment employing twenty or more persons on any day during the accounting year. Section 2(13) defines who is an employee for its purposes, using a wage ceiling that the amending Act of 2015 raised to ₹ 21,000 per month; a person drawing more than that is outside the Act altogether. Section 8 sets the qualifying service at thirty working days in the accounting year, and section 9 disqualifies an employee dismissed for fraud, riotous or violent behaviour, or theft, misappropriation or sabotage of the establishment's property. Sections 10 and 11 fix the range of the bonus: a minimum of 8·33 per cent of the salary or wage earned in the accounting year, payable whether or not the employer has any allocable surplus, and a maximum of twenty per cent where the allocable surplus permits. Section 12 is the calculation rule and the one most often examined: where the salary or wage exceeds ₹ 7,000 or the minimum wage for the scheduled employment fixed by the appropriate Government, whichever is higher, the bonus is calculated as if the salary were that higher figure — so a highly paid employee within the eligibility ceiling does not draw a bonus proportionate to his actual pay. Section 19 requires payment within eight months of the close of the accounting year, and section 22 sends disputes about bonus to the authorities under the Industrial Disputes Act. Two further points of context matter. The expression 'scheduled employment' takes its meaning from section 2(g) of the Minimum Wages Act, 1948, which is why a wage fixed under that Act can enter the bonus calculation at all. And the Payment of Bonus Act is one of the four statutes subsumed by the Code on Wages, 2019, along with the Minimum Wages Act, 1948, the Payment of Wages Act, 1936 and the Equal Remuneration Act, 1976; the four labour Codes were brought into force on 21 November 2025, and a question set on a 2023 paper is answered on the Acts as they then stood.

The labour law block is the largest single subject area in this paper and its most characteristic item is the small numerical application, where a statutory rule is dressed as a short fact pattern and the candidate has to apply the right section rather than recall it. This question is a clean example, and its difficulty is concentrated in one clause of one section. Everything else in the stem is either given or easy: the employee is stated to be eligible, the rate is stated to be ten per cent, and the period is stated to be a full accounting year. What the item actually tests is whether the candidate knows that the calculation ceiling in section 12 is not a flat ₹ 7,000 but the higher of ₹ 7,000 and the minimum wage. The stem's phrasing is the tell: naming the Minimum Wages Act while stating the employee's wage is not scene-setting but the fact on which the answer turns, and a candidate trained to read a fact pattern for its operative words will notice that no clause in a well-set problem is decorative. The option set is built accordingly. One option is the section's own figure of ₹ 7,000 mistaken for an answer, one is the arithmetic of the pre-amendment rule, one is a round number for the approximator, and one is right. Working the problem in the statute's own order — coverage, eligibility, base, rate — and finishing the arithmetic exactly is what this block rewards throughout, and the same method answers the compensation and wage-period questions elsewhere in the paper.

• Section 12 of the Payment of Bonus Act, 1965 provides that where the salary or wage of an employee exceeds ₹ 7,000 or the minimum wage for the scheduled employment as fixed by the appropriate Government, whichever is higher, per month, the bonus is calculated as if his salary or wage were that higher figure. The words 'whichever is higher' are what this question turns on.
• In this problem the wage of ₹ 9,000 is itself the minimum wage fixed under the Minimum Wages Act, 1948, so the higher of the two figures is ₹ 9,000 and the calculation base is ₹ 9,000 a month. Bonus at ten per cent for a full year is ten per cent of ₹ 1,08,000, that is ₹ 10,800.
• Section 2(13) defines an employee as a person drawing a salary or wage not exceeding ₹ 21,000 per month, a ceiling raised from ₹ 10,000 by the amending Act of 2015, which also replaced the words 'three thousand five hundred rupees' in section 12 with the present formula, both with effect from 1 April 2014.
• Section 10 fixes a minimum bonus of 8·33 per cent of the salary or wage earned during the accounting year, payable whether or not the employer has any allocable surplus, and section 11 fixes a maximum of twenty per cent where the allocable surplus permits.
• Section 8 requires an employee to have worked for at least thirty working days in the accounting year to be eligible, section 9 disqualifies an employee dismissed for fraud, riotous or violent behaviour or theft, misappropriation or sabotage, and section 19 requires payment within eight months of the close of the accounting year.
• The expression 'scheduled employment' in section 12 carries the meaning given to it by section 2(g) of the Minimum Wages Act, 1948, which is the statutory bridge that lets a minimum wage notification determine the base for a bonus calculation.

• Applying a flat ₹ 7,000 calculation ceiling. Since the 2015 amendment the base is the higher of ₹ 7,000 and the minimum wage for the scheduled employment, which is exactly what the option producing ₹ 8,400 ignores.
• Missing the significance of the words 'as fixed under the Minimum Wages Act, 1948' in the stem. They identify the ₹ 9,000 as the minimum wage for the scheduled employment and therefore as the higher of the two figures in section 12.
• Confusing the eligibility ceiling with the calculation ceiling. Section 2(13) decides who is covered, at ₹ 21,000 a month; section 12 decides the figure on which the bonus of a covered employee is worked out.
• Answering with a monthly figure when the question asks for a year's bonus. The base must be multiplied by twelve before the percentage is applied, or the percentage applied and then multiplied, which comes to the same thing.
• Rounding. One option in this set is a round number close to the correct answer, and it exists for the candidate who treats ₹ 1,08,000 as roughly a lakh.

Labour law in this exam is asked in three shapes, and this block of the paper contains all three. The first is the numerical application seen here: a short fact pattern, a statutory formula, and four amounts of which one is right, one applies a superseded version of the rule, one reproduces a figure from the section itself and one is a rounded approximation. The second is the provision-location question — under which Act or which section a named requirement is found — where knowing the section number is worth more than knowing the substance, because the options are usually four neighbouring statutes. The third is definitional, asking what a term such as allocable surplus, scheduled employment or continuous service means. Preparation for all three is section-wise rather than topic-wise: for each of the major Acts, a list of the sections that carry a number — a ceiling, a percentage, a period of days or months — with the number against each. Numbers are what these questions are made of, and the amendments that change them are what separate a candidate reading a current text from one reading an old one.

No directly related past PYQ was found.

• practice — not a real PYQ

  An employee covered by the Payment of Bonus Act, 1965 draws a salary of ₹ 15,000 per month, while the minimum wage fixed by the appropriate Government for that scheduled employment is ₹ 8,000 per month. On what monthly figure must his bonus be calculated?

  • (a)₹ 7,000
  • (b)₹ 8,000
  • (c)₹ 15,000
  • (d)₹ 21,000

  Answer(b) ₹ 8,000 — his actual salary exceeds both ₹ 7,000 and the minimum wage, so section 12 applies and the bonus is calculated as if his wage were the higher of those two figures, which is the minimum wage of ₹ 8,000. His real salary of ₹ 15,000 is used only to check that he is within the eligibility ceiling of ₹ 21,000 in section 2(13), not as the base for the calculation.

• practice — not a real PYQ

  Under the Payment of Bonus Act, 1965, the minimum and the maximum bonus payable to an eligible employee in an accounting year are, respectively

  • (a)8·33 per cent and 20 per cent of the salary or wage
  • (b)10 per cent and 20 per cent of the salary or wage
  • (c)8·33 per cent and 15 per cent of the salary or wage
  • (d)5 per cent and 20 per cent of the salary or wage

  Answer(a) 8·33 per cent and 20 per cent of the salary or wage — section 10 requires the minimum bonus of 8·33 per cent to be paid whether or not the employer has any allocable surplus in the year, which is what makes it a statutory obligation rather than a share of profits, and section 11 caps the bonus at twenty per cent where the allocable surplus exceeds the minimum.