i'm resigned from my ex-company 2008 august,but they donnt pay the last year bonus to me (2007 april to 2008 march).i have worked with them for 2 and half years.they paid bonus to all other staffs.is i eligible for that? any laws regarding in favour of me?
please advise me
pareemon nb
From India, Kochi
please advise me
pareemon nb
From India, Kochi
Dear essenvsp,
If an employees salary is Rs 9000 and he was on loss of pay for 10 days, then his salary for that month would be Rs 5538. This is above Rs 3500 and naturally, he will get bonus on Rs 3500. But this practice should be disallowed. In any month if there is Loss of Pay, the loss of pay should be proportionally deducted from Rs 3500. That means the daily average salary on Rs 3500 is Rs 134.62 (3500/ 26) For 10 days of LOP, take 1346.2 (134.62 X 10) and deduct it from Rs 3500 and for that month bonus eligible salary would be Rs 2153.80.
For an employee whose bonus qualifying salary is already less than Rs 3500 the above practice is not required since the deduction is already made from that lesser amount.
Instead of dividing the salary by 26, you can divide it by 30 also because it favours employee to divide the gross salary by 30 in cases of deductions. Normally, for all benefits like leave encashment , layy off wages, retrenchment compensation and gratuity, the average salary is arrived at by dividing the salary by 26.
Regards,
Madhu.T.K
From India, Kannur
4249If an employees salary is Rs 9000 and he was on loss of pay for 10 days, then his salary for that month would be Rs 5538. This is above Rs 3500 and naturally, he will get bonus on Rs 3500. But this practice should be disallowed. In any month if there is Loss of Pay, the loss of pay should be proportionally deducted from Rs 3500. That means the daily average salary on Rs 3500 is Rs 134.62 (3500/ 26) For 10 days of LOP, take 1346.2 (134.62 X 10) and deduct it from Rs 3500 and for that month bonus eligible salary would be Rs 2153.80.
For an employee whose bonus qualifying salary is already less than Rs 3500 the above practice is not required since the deduction is already made from that lesser amount.
Instead of dividing the salary by 26, you can divide it by 30 also because it favours employee to divide the gross salary by 30 in cases of deductions. Normally, for all benefits like leave encashment , layy off wages, retrenchment compensation and gratuity, the average salary is arrived at by dividing the salary by 26.
Regards,
Madhu.T.K
From India, Kannur
Concept of ex-gratia payment
As per the Payment of Bonus Act - All employees who are drawing salary (Basic + DA only) not more than Rs 10000 and who had worked at least for 30 days in the financial year (say 2008-09) will be eligible for bonus.
This has already been explained and discussed in detail.
Now, what should a company do for employees drawing more than Rs 10000 ??
Here the concept of ex-gratia payment is applied.
It is generally referred to as "ex-gratia in lieu of bonus".
"Ex gratia" comes from Latin and means "arising out of grace" - as a matter of favour, a payment made out of gratitude or courtesy, or in recognition of a special contribution.
Thus it is a gratuitous payment and as such there are no fixed quantum or rules to decide the amount. It is at the discretion of the management.
However, it is generally at least equal or more than (quite often) the bonus paid to worker. It is not a fixed amount; rather it varies from grade to grade, designation to designation or department to department - management being the sole judge of its criterion and quantum.
In other words, ex-gratia payment is out of purview of the payment of Bonus Act.
Hope this clears your doubts about ex-gratia.
Regards.
From India, Delhi
As per the Payment of Bonus Act - All employees who are drawing salary (Basic + DA only) not more than Rs 10000 and who had worked at least for 30 days in the financial year (say 2008-09) will be eligible for bonus.
This has already been explained and discussed in detail.
Now, what should a company do for employees drawing more than Rs 10000 ??
Here the concept of ex-gratia payment is applied.
It is generally referred to as "ex-gratia in lieu of bonus".
"Ex gratia" comes from Latin and means "arising out of grace" - as a matter of favour, a payment made out of gratitude or courtesy, or in recognition of a special contribution.
Thus it is a gratuitous payment and as such there are no fixed quantum or rules to decide the amount. It is at the discretion of the management.
However, it is generally at least equal or more than (quite often) the bonus paid to worker. It is not a fixed amount; rather it varies from grade to grade, designation to designation or department to department - management being the sole judge of its criterion and quantum.
In other words, ex-gratia payment is out of purview of the payment of Bonus Act.
Hope this clears your doubts about ex-gratia.
Regards.
From India, Delhi
Mr Madhu,
It was a very clear reply, have 3 queries :
1. If an employee has worked only for 2 months with the company where his bonusable salary was 4000/- p.m. then he will be eligible for bonus as follows: 3500*2=7000*20%=1400/-(assuming we are giving 20% bonus) Is it correct?
2. If an employee's salary was 5000/- p.m. and changed after 3 months and become clearly more than 10,000/- then it is legally safe to pay him bonus for 3 months only i.e. 3500*3=10500*20%=2100/-Is it correct?
3. If the company has done well and decides to give max bonus 20% then 8400 is the max an employee will receive (asuming salary is more than 3500/-)
Regards,
Sanskrati
From India, Delhi
It was a very clear reply, have 3 queries :
1. If an employee has worked only for 2 months with the company where his bonusable salary was 4000/- p.m. then he will be eligible for bonus as follows: 3500*2=7000*20%=1400/-(assuming we are giving 20% bonus) Is it correct?
2. If an employee's salary was 5000/- p.m. and changed after 3 months and become clearly more than 10,000/- then it is legally safe to pay him bonus for 3 months only i.e. 3500*3=10500*20%=2100/-Is it correct?
3. If the company has done well and decides to give max bonus 20% then 8400 is the max an employee will receive (asuming salary is more than 3500/-)
Regards,
Sanskrati
From India, Delhi
In the first case, you can pay him bonus for two months' work as calculated by you.
In the second case, he is eligible for bonus only for the period of three months during which he was an 'employee' and the rest of the period during which he received higher salary and thereby became out of coverage shall not qualify for bonus. Therefore, he will have to be paid bonus for 3 months only. In the years to come, he will receive no bonus unless otherwise amended.
If the company has decided to pay the maximum bonus, then the maximum amount of bonus would be Rs 8400.
Regards,
Madhu.T.K
From India, Kannur
In the second case, he is eligible for bonus only for the period of three months during which he was an 'employee' and the rest of the period during which he received higher salary and thereby became out of coverage shall not qualify for bonus. Therefore, he will have to be paid bonus for 3 months only. In the years to come, he will receive no bonus unless otherwise amended.
If the company has decided to pay the maximum bonus, then the maximum amount of bonus would be Rs 8400.
Regards,
Madhu.T.K
From India, Kannur
If an employee is getting a salary of Rs 18000 whereas his basic + DA is only Rs 6500 (ie, less than Rs 10000), then he is eligible for bonus. For bonus eligibility salary means basic salary + Dearness allowance. Invariably, it is on such salary that bonus is calculated.
Regards,
Madhu.T.K
From India, Kannur
Regards,
Madhu.T.K
From India, Kannur
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
Bonus Calculation.xls
BONUS CALCULATION RULE (1).pdf