Dear All Seniors,
I am working in a new company under a service contract agreement for 2 years from 2nd July 2014 until now. Since I have already completed one year, am I eligible for the bonus for the last year? The company was incorporated in December 2013. Is there a policy that may allow them to avoid paying the bonus to employees? Please advise.
Thanking you,
Raju
From India, Bangalore
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1I am working in a new company under a service contract agreement for 2 years from 2nd July 2014 until now. Since I have already completed one year, am I eligible for the bonus for the last year? The company was incorporated in December 2013. Is there a policy that may allow them to avoid paying the bonus to employees? Please advise.
Thanking you,
Raju
From India, Bangalore
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Payment of Bonus Act, 1965: Relief for Newly Formed Companies
The Payment of Bonus Act, 1965 provides relief to newly formed companies under Section 16 from paying bonuses to their employees, as outlined below:
Where an establishment is newly set up, whether before or after the commencement of this Act, the employees of such establishment are entitled to be paid bonuses under this Act. If the company, during the first five accounting years following the accounting year in which the employer sells the goods produced or manufactured by him or renders services, as the case may be, from such establishment, bonuses shall only be payable for the accounting year in which the employer derives a profit from the establishment. These bonuses shall be calculated in accordance with the provisions of this Act without applying the formula of set on and set off of allocable surplus as given under Section 15 of the Act.
Therefore, it is advisable to verify from available sources whether the company has begun earning profits from its business or not.
Regards,
BS Kalsi
From India, Mumbai
Acknowledge(0)Amend(0)
The Payment of Bonus Act, 1965 provides relief to newly formed companies under Section 16 from paying bonuses to their employees, as outlined below:
Where an establishment is newly set up, whether before or after the commencement of this Act, the employees of such establishment are entitled to be paid bonuses under this Act. If the company, during the first five accounting years following the accounting year in which the employer sells the goods produced or manufactured by him or renders services, as the case may be, from such establishment, bonuses shall only be payable for the accounting year in which the employer derives a profit from the establishment. These bonuses shall be calculated in accordance with the provisions of this Act without applying the formula of set on and set off of allocable surplus as given under Section 15 of the Act.
Therefore, it is advisable to verify from available sources whether the company has begun earning profits from its business or not.
Regards,
BS Kalsi
From India, Mumbai
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The Payment Of Bonus Act, 1965 5 november 2016.pdf
Payment of Bonus Act 1965.doc