Dear All,
Company i work for was formed as partnership company in the year 2000. In 2004 it became Private Limited company. All the employees are on Contract bases & not on salary. We have staff of 25 people.
I had 2 queries:
1) Is bonus Compulsory? Does company have to pay it compulsory & at fix rate even if employees are on Contract Basis.
2) Is Gratuity apply for employees on contract too?
As when raised query with management, management replied that company will deduct gratuity portions from salary to employee. as it Happens in all companies.
Just wanted to know that Is Gratuity compulsory? & does amount gets deducted from existing salary.
From India, Mumbai
Company i work for was formed as partnership company in the year 2000. In 2004 it became Private Limited company. All the employees are on Contract bases & not on salary. We have staff of 25 people.
I had 2 queries:
1) Is bonus Compulsory? Does company have to pay it compulsory & at fix rate even if employees are on Contract Basis.
2) Is Gratuity apply for employees on contract too?
As when raised query with management, management replied that company will deduct gratuity portions from salary to employee. as it Happens in all companies.
Just wanted to know that Is Gratuity compulsory? & does amount gets deducted from existing salary.
From India, Mumbai
If the contractual employees are full time employees and exclusively working for your organization then all statutory benefits including bonus under Payment of bonus act and gratuity under Payment of gratuity act are applicable to them.
Deducting gratuity contribution from employees salary would be a wrong approach and against the basics of the Payment of Gratuity act.
From India, Pune
173Deducting gratuity contribution from employees salary would be a wrong approach and against the basics of the Payment of Gratuity act.
From India, Pune
Dear Saloni, To deduct Gratuikty from the salary is not justifiable and its non copmpliance. Please be updated about latest trend of PF and Bonus. Regards, Ramyash
From India, Mumbai
From India, Mumbai
Dear Saloni,
Before replying your query, I would like to inform you that, all the employees who are working in any organization, whether he / she is a regular one or on contractual basis, both are employee for the organization. And, all of them are entitled for all the types of benefits, i.e. like ESI, EPF, Bonus, Leaves, etc. As you have mentioned that the organization where you are working has more than 25 employees, then you organization is covered under ESI, EPF and also liable to pay Leaves and Bonus too.
Now, as are willing to know that paying Bonus is Compulsory, then I would like to tell you that it is not compulsory. It depends on various factors like, type of industry, nature of work, rate of profit, etc. You may go through this discussion for more information; https://www.citehr.com/474403-not-gi...-employee.html
Secondly, eligibility for Gratuity. In this regard, plz. note that gratuity is paid to those employees who completed 4 years 240 days / 4 years 190 days (as per work nature) in one organization.
But, as now the Contractual concept is on boom, and employer thinks that engaging someone on contract basis, can save them from the obligatory benefits of the employees, which is completely wrong. On conceptual basis, anyone may deny this.
But lawfully, if for all 5 years, the contract was in the same company and a total of 240 working days recorded in each year, then the employee will be eligible for Gratuity. So, the proper documents should be with the employee to proof this. If any such employee left the job, he / she should approach the management for payment of gratuity. If the management denies, then the employee may file complaint against the management with support proper documents.
And, deducting the Gratuity part from the salary of employees is unlawful and the employees should oppose this. Complaint for this also may be lodged to Labour Office.
Hope most of the things may be clear to you. Be Happy.
From India, Delhi
Before replying your query, I would like to inform you that, all the employees who are working in any organization, whether he / she is a regular one or on contractual basis, both are employee for the organization. And, all of them are entitled for all the types of benefits, i.e. like ESI, EPF, Bonus, Leaves, etc. As you have mentioned that the organization where you are working has more than 25 employees, then you organization is covered under ESI, EPF and also liable to pay Leaves and Bonus too.
Now, as are willing to know that paying Bonus is Compulsory, then I would like to tell you that it is not compulsory. It depends on various factors like, type of industry, nature of work, rate of profit, etc. You may go through this discussion for more information; https://www.citehr.com/474403-not-gi...-employee.html
Secondly, eligibility for Gratuity. In this regard, plz. note that gratuity is paid to those employees who completed 4 years 240 days / 4 years 190 days (as per work nature) in one organization.
But, as now the Contractual concept is on boom, and employer thinks that engaging someone on contract basis, can save them from the obligatory benefits of the employees, which is completely wrong. On conceptual basis, anyone may deny this.
But lawfully, if for all 5 years, the contract was in the same company and a total of 240 working days recorded in each year, then the employee will be eligible for Gratuity. So, the proper documents should be with the employee to proof this. If any such employee left the job, he / she should approach the management for payment of gratuity. If the management denies, then the employee may file complaint against the management with support proper documents.
And, deducting the Gratuity part from the salary of employees is unlawful and the employees should oppose this. Complaint for this also may be lodged to Labour Office.
Hope most of the things may be clear to you. Be Happy.
From India, Delhi
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