As per the amendment, we have to pay statutory bonus of Rs. 7000 or minimum wage, whichever is higher. Kindly guide me on the basis to comply with the statutory requirement while ensuring it does not impose a financial burden on the company.
Your reply in this regard is highly appreciated.
Kind Regards,
Bhaskar
From India, Hyderabad
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1Your reply in this regard is highly appreciated.
Kind Regards,
Bhaskar
From India, Hyderabad
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Dear Bhaskar,
It will surely put a burden on the company if, till now, your company was paying a bonus of 3500/-. You can't do anything but comply with the notification. There is a way that if, till now, you were paying a bonus at 20%, you can reduce it to 8.33%. However, for that, you need to seek advice from seniors as there are many other aspects involved, such as unions, agreements, past bonus records, etc.
From India, Pune
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It will surely put a burden on the company if, till now, your company was paying a bonus of 3500/-. You can't do anything but comply with the notification. There is a way that if, till now, you were paying a bonus at 20%, you can reduce it to 8.33%. However, for that, you need to seek advice from seniors as there are many other aspects involved, such as unions, agreements, past bonus records, etc.
From India, Pune
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Dear Bhasker,
The answer you expect is that you should have your cake and eat it too. How is this possible? Whatever the rate of bonus your company has been paying thus far, if you calculate it according to the latest amendment made to sec.12 of the Payment of Bonus Act with retrospective effect from 01-04-2014, the employees will receive a higher amount of bonus, and the employer will have to bear a greater financial burden regardless of the bonus rate. The recent upward revision of the salary limit from Rs. 10,000/= to Rs. 21,000/= per month and the notional salary limit from Rs. 3,500/= to Rs. 7,000/= per month has resulted in several consequences:
(i) Employees within the salary range of Rs. 10,000/= to Rs. 20,999/= will now also qualify for a bonus, thereby increasing the number of employees eligible for bonuses.
(ii) The actual bonus amount payable on the notional salary has doubled.
(iii) The retrospective effect of the amendment includes arrears of bonus.
Therefore, it is impossible to alleviate the additional financial burden by rectifying the past. The only feasible approach is to negotiate with the workers and their unions during future bonus discussions to accept a lower percentage of bonus, which should not be less than the actual bonus amount they have received in previous years.
From India, Salem
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The answer you expect is that you should have your cake and eat it too. How is this possible? Whatever the rate of bonus your company has been paying thus far, if you calculate it according to the latest amendment made to sec.12 of the Payment of Bonus Act with retrospective effect from 01-04-2014, the employees will receive a higher amount of bonus, and the employer will have to bear a greater financial burden regardless of the bonus rate. The recent upward revision of the salary limit from Rs. 10,000/= to Rs. 21,000/= per month and the notional salary limit from Rs. 3,500/= to Rs. 7,000/= per month has resulted in several consequences:
(i) Employees within the salary range of Rs. 10,000/= to Rs. 20,999/= will now also qualify for a bonus, thereby increasing the number of employees eligible for bonuses.
(ii) The actual bonus amount payable on the notional salary has doubled.
(iii) The retrospective effect of the amendment includes arrears of bonus.
Therefore, it is impossible to alleviate the additional financial burden by rectifying the past. The only feasible approach is to negotiate with the workers and their unions during future bonus discussions to accept a lower percentage of bonus, which should not be less than the actual bonus amount they have received in previous years.
From India, Salem
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Amendment to Payment of Bonus Act 2015.jpg
Payment of Bonus Act Amendment.pdf