Dear Sir,
We have a practice of calculating and giving bonus as follows:
All employees below one year of service will get 8.33% and above one year of service will have 14% of bonus.
As we are in garment field and undergoes rigorous social compliance audits frequently let me make it sure is my practice is leaglly correct or will face any charge of violations under any act or code of conducts.
Awaiting seniors comment on this
From India, Tiruppur
12We have a practice of calculating and giving bonus as follows:
All employees below one year of service will get 8.33% and above one year of service will have 14% of bonus.
As we are in garment field and undergoes rigorous social compliance audits frequently let me make it sure is my practice is leaglly correct or will face any charge of violations under any act or code of conducts.
Awaiting seniors comment on this
From India, Tiruppur
Hi Rameshan,
As per payment of bonus act, any worker who works in the factory for 30 days are eligible for bonus minimum at the rate of 8.33% on the earned wages (Basic & DA) for the bonus period (Oct to Sep or April to March whatever may be the case) subject to minimum of Rs.100/-. Provided that the earned wages (Basic & DA) should not below the minimum wages fixed by the State Government.
If the company giving 14% of bonus for above one year service and 8.33% for below one year service there will be a issue by the compliance auditors as discriminating the workers in giving the benefits to the workers based on service which is not as per the Act. But the aim of the bonus act is to pay the bonus to all the workers based on the profit/loss of the company during the financial period.
If the company fixing as 8.33% as bonus percentage and it should be paid for all the workes as 8.33% irrespective of their service and if it is 14%, it should be 14% for all the employees based on their earned wages (Basic & DA) during the bonus period.
Note: As per payment of bonus Act, all the workers who are earning wages (Basic & DA) up to Rs.10,000 are covered under the act. The maximum ceiling for the payment of bonus is Rs.3,500. i.e if any worker who draws Rs.5,000 are limited to Rs.3,500/- if his bonus amount exceeds Rs.3,500. (if the company wishes to pay more than Rs.3,500/- as bonus can pay it without limitation)
Hope the information provided is useful.
Regards
Ganesh
From India, Madras
As per payment of bonus act, any worker who works in the factory for 30 days are eligible for bonus minimum at the rate of 8.33% on the earned wages (Basic & DA) for the bonus period (Oct to Sep or April to March whatever may be the case) subject to minimum of Rs.100/-. Provided that the earned wages (Basic & DA) should not below the minimum wages fixed by the State Government.
If the company giving 14% of bonus for above one year service and 8.33% for below one year service there will be a issue by the compliance auditors as discriminating the workers in giving the benefits to the workers based on service which is not as per the Act. But the aim of the bonus act is to pay the bonus to all the workers based on the profit/loss of the company during the financial period.
If the company fixing as 8.33% as bonus percentage and it should be paid for all the workes as 8.33% irrespective of their service and if it is 14%, it should be 14% for all the employees based on their earned wages (Basic & DA) during the bonus period.
Note: As per payment of bonus Act, all the workers who are earning wages (Basic & DA) up to Rs.10,000 are covered under the act. The maximum ceiling for the payment of bonus is Rs.3,500. i.e if any worker who draws Rs.5,000 are limited to Rs.3,500/- if his bonus amount exceeds Rs.3,500. (if the company wishes to pay more than Rs.3,500/- as bonus can pay it without limitation)
Hope the information provided is useful.
Regards
Ganesh
From India, Madras
Thank you Sir,and this information is highly sufficient to clear my query.
But again it is my job to persuade the management to standardise the bonus% otherwise as you rightly pointed out, I may invite charges of discrimination
From India, Tiruppur
But again it is my job to persuade the management to standardise the bonus% otherwise as you rightly pointed out, I may invite charges of discrimination
From India, Tiruppur
Hi,
Bonus will be declared based upon the set off,set on & allocable surplus.The payment of bonus to the employees should be uniform i.e.of the same ratio.
Declaring the bonus 8.33% for the employees below one year & 14% above one year is not advisable.
Reena
From India, Hyderabad
Bonus will be declared based upon the set off,set on & allocable surplus.The payment of bonus to the employees should be uniform i.e.of the same ratio.
Declaring the bonus 8.33% for the employees below one year & 14% above one year is not advisable.
Reena
From India, Hyderabad
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