Bonus not paid
Querist :
Anonymous
(Querist) 13 May 2020
This query is : Resolved
Dear Sir,
When the company incurred the loss during the current financial year, management still not yet release the bonus to employees. Does the company bound to pay minimum bonus or not.
Guest
(Expert) 13 May 2020
Payment of Bonus Act --1965 ' Act stipulates that even when the Company makes a loss it is obliged to pay a Bonus of 8.33% ( equivalent to One Month Wages ) Better discuss with an Local Good Advocate personally in detail. and proceed. please..
Raj Kumar Makkad
(Expert) 13 May 2020
Paying the bonus is not mandatory subject to inception of any organization is not older then 5 years subject to meeting with loss, apart from that it has been mandatory to be paid. ... Min 8.33% ( 1 CTC ) & Max 20% as per bonus act 1965 as amended up to date.
A bonus is an additional payment given to employees with the intention to motivate them. The Statutory Bonus came into existence with the approval of the Payment of Bonus Act in 1965 by the Government. According to this act, certain establishments had to pay an amount to their employees based on their profitability each year. This amount was to be over and above their basic salaries.
Earlier this act only covered employees that were earning up to Rs. 10,000 per month and lower. However, the amendment has raised this ceiling to Rs. 21,000. This has been done with the intention of bringing more employees under the eligibility of the Bonus Act. This also means that employers will have to pay employees that fall between the Rs. 10,000 and Rs. 21,000 the pending Bonus amounts since April 1, 2014.
Maximum bonus limit increased to 20% of Rs. 7000
Earlier, the maximum statutory bonus that could be paid out was 20% of Rs. 3500. However, this has been changed to 20% of Rs. 7,000 (or minimum wages, whichever is higher). This gives companies a chance to allot a greater portion of employees’ CTCs towards bonuses.
Minimum Bonus increased to 8.33% of Rs 7,000
Before the amendment, the minimum that could be paid to employee under the bonus act was Rs. 292 (8.33% of 3,500). However, this amount has been doubled to become Rs. 583( or 8.33% of the minimum wages, whichever is higher) . Since, companies are expected to pay all arrears since 2014, this particular change seems to be causing the highest discomfort for employers. In states where the minimum wage is higher than Rs 7,000, the statutory arrears liability becomes even higher.
P. Venu
(Expert) 14 May 2020
The employer ought to pay the bonus, unless otherwise exempted.
Rajendra K Goyal
(Expert) 14 May 2020
Please provide following information:
What is your pay / wages / total payment monthly and during Financial Year?
What is your post?
When the company was started / came in production?
How many workers are there in the company / concern?
How much loss is there in the Financial year?
What is the history of company in payment of bonus?
Dr J C Vashista
(Expert) 14 May 2020
Very well explained and advised by expert Mr. Raj Kumar Makkad.
Please reply questions raised by expert Mr. Rajendra K Goyal, which are relevant to your query.
Raj Kumar Makkad
(Expert) 14 May 2020
Thanks a lot expert J C Vashishatha for agreeing with my reply.
Rajendra K Goyal
(Expert) 17 May 2020
Sought information not provided.
In the given situation reply from expert Raj Kumar Makkad is informative and sufficient.
