Dear seniors,
Once again, I need your valuable suggestions. I have been working with a Bangalore-based IT company that is seven years old for 1.5 years. My joining date was 1st April 2015. According to the law, I am eligible to receive an annual bonus.
When I inquired about this with HR, she mentioned that the management has decided to announce the bonus during Diwali. My concern was whether an employee who resigns before Diwali would still be eligible for the bonus. She responded that they would not be eligible.
My question is: Does the management have the authority to announce the bonus at any time they wish? What happens to employees who are relieved before the announcement?
Kindly provide your suggestions.
Thanks,
Neha
From India, Mumbai
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2Once again, I need your valuable suggestions. I have been working with a Bangalore-based IT company that is seven years old for 1.5 years. My joining date was 1st April 2015. According to the law, I am eligible to receive an annual bonus.
When I inquired about this with HR, she mentioned that the management has decided to announce the bonus during Diwali. My concern was whether an employee who resigns before Diwali would still be eligible for the bonus. She responded that they would not be eligible.
My question is: Does the management have the authority to announce the bonus at any time they wish? What happens to employees who are relieved before the announcement?
Kindly provide your suggestions.
Thanks,
Neha
From India, Mumbai
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Dear Neha,
In general, the bonus for the last financial year (2015-2016) is being paid on Diwali or Dussehra. As your date of joining (DOJ) is 01 April 2015, you are eligible for a 1-year bonus even if you quit as part of FnF. You are eligible for 1 year as well as from 01 April 2016 until the last day you are employed. The bonus payable is as per the statutory and management is supposed to follow the Bonus Act.
From India, Bangalore
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In general, the bonus for the last financial year (2015-2016) is being paid on Diwali or Dussehra. As your date of joining (DOJ) is 01 April 2015, you are eligible for a 1-year bonus even if you quit as part of FnF. You are eligible for 1 year as well as from 01 April 2016 until the last day you are employed. The bonus payable is as per the statutory and management is supposed to follow the Bonus Act.
From India, Bangalore
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Hello, I am an MBA in Human Resource and have qualified my UGC NET in 2013 but haven't been able to work. Please advise me on what I can do to either work from home. Are there any courses that can cover up my non-working status for these 4 years? How can I get a good job? Please advise.
From India, Siuri
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From India, Siuri
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The time limit for payment of bonus has been fixed in the Payment of Bonus Act, 1965 itself. As per sec. 20(b) of the PB Act, normally the bonus payable under the Act pertaining to an Accounting Year shall be paid in cash to the eligible employees within 8 months from the date of close of the accounts of such Accounting Year.
Since the number of companies adopting the Financial Year as Accounting Year under the Act is more in general, the 8-month limitation ends on November 30. The festival of Deepavali also falls always during October-November months every year. The decisions on the quantum and disbursement of bonus due for the Accounting year are made either unilaterally or collectively just before the festival. It is a matter of sheer coincidence - that's all. So, the declaration of bonus on a particular date is not a prerogative of the management; on the other hand, disbursement of bonus before the expiry of the time limit is a statutory obligation on the part of the employer.
Bonus for any AY is payable to all eligible employees who worked in that AY other than those dismissed for the reasons mentioned in sec. 9 of the Act, whether or not they are in the service of the employer on the date of declaration or disbursement of the bonus.
From India, Salem
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Since the number of companies adopting the Financial Year as Accounting Year under the Act is more in general, the 8-month limitation ends on November 30. The festival of Deepavali also falls always during October-November months every year. The decisions on the quantum and disbursement of bonus due for the Accounting year are made either unilaterally or collectively just before the festival. It is a matter of sheer coincidence - that's all. So, the declaration of bonus on a particular date is not a prerogative of the management; on the other hand, disbursement of bonus before the expiry of the time limit is a statutory obligation on the part of the employer.
Bonus for any AY is payable to all eligible employees who worked in that AY other than those dismissed for the reasons mentioned in sec. 9 of the Act, whether or not they are in the service of the employer on the date of declaration or disbursement of the bonus.
From India, Salem
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Umakanthan Sir,
You answered it correctly. In Maharashtra, payment of bonus is to be made by cheque.
"As per sec. 20(b) of the PB Act, normally the bonus payable under the Act pertaining to an Accounting Year shall be paid in cash to the eligible employees within 8 months from the date of close of the accounts of such Accounting Year."
Sir, why did you mention "normally" in the above statement?
From India, Mumbai
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You answered it correctly. In Maharashtra, payment of bonus is to be made by cheque.
"As per sec. 20(b) of the PB Act, normally the bonus payable under the Act pertaining to an Accounting Year shall be paid in cash to the eligible employees within 8 months from the date of close of the accounts of such Accounting Year."
Sir, why did you mention "normally" in the above statement?
From India, Mumbai
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Dear seniors, Thank you. It means even if the management doesn’t announce the bonus befoŕe diwali still the employee leaving before that wiĺl be eligible to get the bonus? Right?
From India, Mumbai
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From India, Mumbai
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Very correctly defined Bonus Act. Any staff who has worked for at least 1 month is eligible for a bonus. Even if he/she is not working with the company during the time of bonus disbursement, he/she is eligible.
Previously, the bonus slab was Rs 3500/-, which has been revised to Rs 7000/- or minimum wages, whichever is higher, in the year 2015. The bonus slab is for one year of service, and it can be reduced with the reduced attendance/service.
In your case, you are eligible Neha, and if they do not pay, tell them that you will drag them to the court of law. Management can announce any time on or before Nov 30 and the maximum is up to management. The minimum is as per the slab.
Hope your query is addressed!
From India, Kochi
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Previously, the bonus slab was Rs 3500/-, which has been revised to Rs 7000/- or minimum wages, whichever is higher, in the year 2015. The bonus slab is for one year of service, and it can be reduced with the reduced attendance/service.
In your case, you are eligible Neha, and if they do not pay, tell them that you will drag them to the court of law. Management can announce any time on or before Nov 30 and the maximum is up to management. The minimum is as per the slab.
Hope your query is addressed!
From India, Kochi
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Before answering the query raised by the dear (anonymous) friend, I thank him/her for giving an opportunity to read my previous answer again and correct the inadvertent mistake in that - the section prescribing the time limit for payment of bonus in the Payment of Bonus Act, 1965 is sec. 19(b) and NOT 20(b).
Coming to the query that why I used the word "normally" in the opening part of my answer is this:
The term "Accounting Year" as defined in sec. 2(1) of the Payment of Bonus Act, 1965 relates to Accounting Years with different stretches of periods followed by different types of establishments according to their constitution viz., (i) Corporation (ii) company (iii) any other type having its commencement from 1st April or having any date other than 31st March as the day of closing and balancing of its accounts.
Sec. 19 of the Act prescribes time limits for payment of bonus in respect of two situations - the one in clause (a) is concerned with the dispute situation and the one in clause (b) is regarding any other case within a period of 8 months from the close of the Accounting Year.
That is why I used the qualifying term "normally" in my answer.
From India, Salem
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Coming to the query that why I used the word "normally" in the opening part of my answer is this:
The term "Accounting Year" as defined in sec. 2(1) of the Payment of Bonus Act, 1965 relates to Accounting Years with different stretches of periods followed by different types of establishments according to their constitution viz., (i) Corporation (ii) company (iii) any other type having its commencement from 1st April or having any date other than 31st March as the day of closing and balancing of its accounts.
Sec. 19 of the Act prescribes time limits for payment of bonus in respect of two situations - the one in clause (a) is concerned with the dispute situation and the one in clause (b) is regarding any other case within a period of 8 months from the close of the Accounting Year.
That is why I used the qualifying term "normally" in my answer.
From India, Salem
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Umakanthan sir,
I have a doubt in bonus calculation. Suppose Mr. X has worked only 36 days, and his earned wages are 10800. After 36 days of working, he leaves the company. Please let me know how we will calculate the bonus, whether it is 10800*8.33 or 7000/26*36*8.33.
Please answer with an example if possible.
Thanks in advance.
From India, Basti
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I have a doubt in bonus calculation. Suppose Mr. X has worked only 36 days, and his earned wages are 10800. After 36 days of working, he leaves the company. Please let me know how we will calculate the bonus, whether it is 10800*8.33 or 7000/26*36*8.33.
Please answer with an example if possible.
Thanks in advance.
From India, Basti
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