The Diwali bonus for domestic workers: the law you are looking up was repealed

Every October the same question goes around the building group. How much for the bai, and is there a rule.

Search it and Google offers you the statutory bonus: 8.33 percent minimum, 20 percent maximum, eligibility up to ₹21,000 a month. It looks like a rule. It is not the rule for this, and the Act it comes from was repealed.

So here is what the law actually says, which is close to nothing, and then what people actually pay, and then the argument underneath the whole thing, which turns out to have been running for a decade and to be about a word.

The statute everyone quotes no longer exists

The Code on Wages 2019, section 69, repeals four Acts by name: the Payment of Wages Act 1936, the Minimum Wages Act 1948, the Payment of Bonus Act 1965, and the Equal Remuneration Act 1976.

The four labour codes were brought into force on 21 November 2025. The bonus notifications under the new Code followed on 25 August 2026, keeping the familiar numbers: eligibility at ₹21,000 a month, calculation ceiling ₹7,000 or the central minimum wage, whichever is higher, minimum 8.33 percent, maximum 20 percent.

So the percentages survived. The Act did not. And none of it was ever about a domestic worker anyway.

Why none of it reaches her

This is worth following because it is not an exclusion anybody wrote down. There is no clause naming domestic workers. They fall out of the definitions before you reach any clause at all.

Section 2(m): an establishment is a place where any industry, trade, business, manufacture or occupation is carried on.

Section 2(k): an employee is a person employed on wages by an establishment.

A house is not a place where industry or trade is carried on. So a domestic worker is not employed by an establishment. So she is not an employee. So no chapter of the Code reaches her, not the bonus chapter and not the minimum wage chapter either. There is a second bar after that, a twenty-person threshold, but you never get to it.

The old Act failed her the same way, through the phrase in any industry. And the Industrial Relations Code 2020 closed the other door explicitly: section 2(p) excludes domestic service from the definition of industry. Parliament had tried that in 1982 and never brought the amendment into force. The Code managed it.

One wrinkle that cuts the other way, worth knowing before anyone tells you the law has never noticed this. Section 50(4) of the Code exempts an employer from register and wage-slip duties where he employs not more than five people for domestic purpose, and defines domestic purpose as relating exclusively to the home or family affairs of the employer. Which is a strange thing to exempt somebody from if they were never in scope.

The Supreme Court looked at this in January and left it alone

Ten domestic workers' unions, from Tamil Nadu to Meghalaya, argued that not paying minimum wages to domestic workers amounts to forced labour under Article 23, and challenged their exclusion from the Minimum Wages Act in most states and from the Code on Wages.

On 29 January 2026 a bench of the Chief Justice and Justice Bagchi disposed of the petition without relief, holding the matter to be one of policy for the executive and the legislature.

The petition's own arithmetic, from the hearing: only fifteen states and two union territories have extended minimum wage protection to domestic workers at all, and domestic work is still not in the Central List of Scheduled Employments, despite a Labour Ministry task force recommending it in 2010.

The reasoning offered from the bench was that mandating minimum wages could mean every household being dragged into litigation by trade unions, and could make households reluctant to hire. Those remarks were publicly condemned by a judicial accountability campaign and by the unions, and workers protested in Chennai and Delhi the following week.

One line from those protests, from the president of a Chennai union: these four labour codes have now repealed all earlier laws and are junking the struggles of the last seventy years, and we have to start again, with weaker laws.

The practical upshot for anyone deciding what to pay in October: there is no legal floor. Whatever you give is voluntary, and that is the entire legal position.

One month's salary is the demand, not the norm

You will read on maid agency sites that one month's salary is the standard practice in Mumbai. That is a vendor writing what its customers would like to be told, and the people running the campaign for exactly that say the opposite.

From the co-founder of a Bengaluru domestic workers' union, five or six years into their campaign: by the third year many employers had started giving a cash bonus, and the only challenge is to get them to give one month's salary, because employers still do not understand why they need to.

So the honest version is that a cash bonus of some size is now common in cities where somebody organised for it, and a full month's salary is the thing being asked for rather than the thing being paid.

What people actually give

The reporting on this is thinner than it should be and much of it is old, so these are marked with where and when.

That Bengaluru message is worth reading twice, because of what it accidentally proves. It circulated in a complex where flats go for over two crore, and it said: use your discretion according to their salary but not half month salary, and no job in the world would pay us half a month's salary as bonus, so why for them.

Somebody only organises against a norm that exists. The message is evidence that half a month was common enough in that building to need arguing down.

The Chennai case is the one to sit with. Eighteen years a domestic worker, eight of them with the same household, ₹3,000 a month. She asked for ₹1,000 once a year. She was let go, and taken back a week later because they could not replace her at that price. She was told she should be content with the saree they gift her every Diwali and not ask for more.

Which brings us to the saree

Is a saree instead of money generous or is it cheap. This is the question people actually want answered, and unusually, both sides are on the record.

Employers, quoted in a Delhi NCR piece where not one of the households interviewed gave cash: a water purifier, because what good would a tea set do for them, and the people who work for us also need clean water. Gold earrings and a television, because they deserve it for the hard work they put in all year. A recurring deposit account opened in her name, because that would help with her child's education and with managing her finances better.

Those are thoughtful gifts, chosen with care, by people who clearly meant well.

Workers, on the same question. From Delhi: many employers distribute their leftover Diwali sweets to us after a week, and we do not want your jhoota mithai. From Bengaluru: we do not want a saree or sweets, we do not want a favour, we want our right.

In 2015 in Bengaluru one union member returned the sweets her employer gave her and asked for a cash bonus. Another turned down a saree and asked for cash. That is what started the campaign.

So the answer is not that gifts are bad. It is that the two sides are not having the same conversation. One is choosing a present. The other is asking to be paid. A present is generous, and a present offered instead of the thing that was asked for is also a refusal, and both of those are true of the same water purifier.

Baksheesh and bonus are two different words

The best writing on this is an academic paper from 2018 about a campaign in Bengaluru, and its title is the argument: between baksheesh and bonus.

Baksheesh is discretionary. It comes from above, it is sentimental, it is given because the giver is moved to give it, and it is often given only when asked for. A bonus is owed. Same money, different relationship, and the campaign was to move from one word to the other.

One of the paper's authors put the objection to baksheesh plainly: the idea is very caste-based, the employer reasons that she is doing punya by giving money, and it is an unconscious feudal system at work in an urban area that resurfaces every festive season. Many see it as the equivalent of giving alms. Workers are not beggars.

How the campaign actually ran is worth knowing because it was so careful. In the first year workers wore a black ribbon through the festive season and said nothing. If an employer asked what it meant, they explained. In the second year, a pamphlet, slid under the door, discussed only if the employer raised it. By the third year many employers were giving a cash bonus.

Three years of ribbons and pamphlets to get to a cash bonus that is still not a month's pay.

The part nobody counts

There is an argument here that most employers have never heard and it is the strongest one.

Festivals mean more domestic work, not less. Deep cleaning before, cooking during, dishes after, guests throughout, and often on days that would otherwise be off. That extra work is generally assumed rather than negotiated and, in most accounts, not paid for separately.

From Delhi: we deep-clean your homes before the festival and do not clean ours, because we have no time or energy left over, and we leave our families and come to your homes on Diwali day and work while you host your parties.

From a worker in Jaipur, recorded for an academic study: we also have a family and children, we also have to celebrate the festivals, so what if we are poor, we also need leave, we also celebrate and cook at home.

Read the bonus that way and it stops being a gift at all. It is at least partly payment for festival overtime that has already been worked.

A thing you will read that is not true

You will find pages citing the Domestic Workers Registration, Social Security and Welfare Act 2008, complete with section numbers. Two otherwise reasonable sources quote its sections 22 and 23 as though reading from a statute book.

There is no such Act. Domestic worker bills were proposed in 1959, 1989, 2004, 2008, 2015, 2016 and 2017, and none of them passed. The thing enacted in 2008 was the Unorganised Workers' Social Security Act, which is different. One of the pages citing the 2008 Act says in its very next paragraph that the relevant bill was never enacted.

It is a bill that has been promoted to a statute by repetition, and it is worth knowing about mainly as a demonstration of how confidently this whole subject gets written by people who have not checked.

Tax, and an asymmetry worth noticing

A cash bonus from an employer is salary income in principle. In practice nobody in this story owes any tax on it: the wages involved are far below the threshold at which any liability arises, so there is nothing to deduct, no TAN, no Form 16, and no return to file.

But the framework does reach a household employer, and here is the odd part. The labour law says a home is not an establishment, so she is not an employee, so she is owed no bonus. The tax law has no establishment test at all: it turns purely on whether an employer-employee relationship exists, and it explicitly does not care whether the employer is a company or an individual, or how many people they employ.

So the same woman is not an employee for the purpose of being paid a bonus, and is an employee for the purpose of that bonus being taxed. Nothing turns on it at these amounts. It is just a good description of where she stands.

Tax note: the Income-tax Act 1961 was replaced by the Income-tax Act 2025 with effect from 1 April 2026, though returns for the year just gone still follow the old law. Section numbers quoted anywhere online, including in our own older posts, should be checked against the new Act before anyone relies on them.

So what should you give

There is no legal answer, so this is ours, and it is a view rather than a rule.

• One month's salary if you can. It is what is being asked for, by the people asking, and it is unambiguous.
• Half a month if you cannot, which is common and is not shameful.
• In cash, and separately from anything else you give. A saree can be a present. It should not be the answer to a request for money.
• Before the festival rather than after, because that is when it is needed and because the shops empty out.
• And ask about leave. Several accounts describe a month's paid leave alongside the cash as the actual custom for a live-in worker, and travel home is the expensive part.

Building staff, security, the person who takes the rubbish, the postman: smaller amounts, and in most buildings there is a collection. Contributing to that is normal and so is giving separately to anyone you deal with directly.

Questions people ask