Sir,
1. If basic salary + DA exceeds 10,000, then no bonus should be paid as per the rules. Is this correct? If so, why do some companies still pay it?
2. When calculating leaves, should days of absence due to disablement, maternity leave, and being laid off (leave with wages) be included?
3. Which of the following are not entitled to a bonus:
- Apprentice
- Contract labor
- Temporary staff
- Seasonal staff
- Probationers
4. Can overtime be included in salary calculations when excluding an employee from receiving a bonus?
Thanks
From India, Mumbai
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91. If basic salary + DA exceeds 10,000, then no bonus should be paid as per the rules. Is this correct? If so, why do some companies still pay it?
2. When calculating leaves, should days of absence due to disablement, maternity leave, and being laid off (leave with wages) be included?
3. Which of the following are not entitled to a bonus:
- Apprentice
- Contract labor
- Temporary staff
- Seasonal staff
- Probationers
4. Can overtime be included in salary calculations when excluding an employee from receiving a bonus?
Thanks
From India, Mumbai
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Hi Buddy,
1. Yes, you were right. The act clearly specifies that employees drawing a salary (Basic+DA) up to 10,000 are eligible for a bonus. However, if any organization wishes to give a bonus to their employees, they can do so because it is a management decision to share their profits with employees beyond the statutory limit.
2. An employee is deemed to have worked in an organization if:
i. he/she has been laid off under an agreement or as permitted by the Standing Orders Act-1946 or under the Industrial Disputes Act-1947.
ii. He has been on leave with wages.
iii. He has been absent due to temporary disablement caused by an accident arising out of and in the course of employment.
iv. The employee has been on maternity leave.
3. Apprentices and Contract Laborers are not entitled to a bonus.
4. No
With Regards,
Mr. Thumbs Up
From India, Chennai
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1. Yes, you were right. The act clearly specifies that employees drawing a salary (Basic+DA) up to 10,000 are eligible for a bonus. However, if any organization wishes to give a bonus to their employees, they can do so because it is a management decision to share their profits with employees beyond the statutory limit.
2. An employee is deemed to have worked in an organization if:
i. he/she has been laid off under an agreement or as permitted by the Standing Orders Act-1946 or under the Industrial Disputes Act-1947.
ii. He has been on leave with wages.
iii. He has been absent due to temporary disablement caused by an accident arising out of and in the course of employment.
iv. The employee has been on maternity leave.
3. Apprentices and Contract Laborers are not entitled to a bonus.
4. No
With Regards,
Mr. Thumbs Up
From India, Chennai
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1.if basic+DA will be more than 10000 then no bonus should be paid as per rule, is it right?
if right then why few co.pay
Current ceiling limit for Bonus eligibility is 10000. In case one’s basic is more than 3500 p.m., his bonus will be calculated as if his basic was 3500.
In case one exceeds the ceiling limit, it’s not mandatory for an organization to make bonus payment in such cases.
Other than statutory obligations, Few other reasons I see why companies make the bonus payment irrespective of one’s basic salary are:
i. Uniformity in compensation structure across particular cadre
ii. Motivation
iii. Settlement / agreement with the union
2. For calculation of leaves can days like absentism due to disablement,maternity and laid off ,leave with wages will be counted ?
I guess what you are trying to understand here is if an employee is entitled for bonus in case of above mentioned reasons.
Yes. He is.
3. which among these are not entitle for bonus
The definition of employee does not differentiate between the daily wager, casual or permanent workmen. All employees falling within the ambit of payment of wages act are entitled to bonus.
apprentice – yes. (Excluding those covered under the apprenticeship act, 1961)
contract labour – yes. However, the liability is Not with the company but the contractor.
temporary staff – assuming they are on company’s role, yes. If he has worked for no less than 30 days in a previous financial year.
seasonal staff – Yes. (pl refer “Shakkar Mills Mazdoor Sangh V. Gwalior Sugar Company Lt., 1985 (50) FLR 320 – seasonal employees are entitled to full minimum bonus guaranteed by the S. 10 and not only the proportionate bonus as u/s 13.
probationers – yes. If he has worked for no less than 30 days in a previous financial year and employed on a monthly wages not exceeding 10000.
4. can we include overtime for calculation of salary for excluding a employee for bonus?
Under sec. 21(i), any other allowance which the employee is for the time being entitled to is excluded. Hence, overtime is not to be factored in for working out bonus eligibility.
Regards,
Chirag B.
From India, Mumbai
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if right then why few co.pay
Current ceiling limit for Bonus eligibility is 10000. In case one’s basic is more than 3500 p.m., his bonus will be calculated as if his basic was 3500.
In case one exceeds the ceiling limit, it’s not mandatory for an organization to make bonus payment in such cases.
Other than statutory obligations, Few other reasons I see why companies make the bonus payment irrespective of one’s basic salary are:
i. Uniformity in compensation structure across particular cadre
ii. Motivation
iii. Settlement / agreement with the union
2. For calculation of leaves can days like absentism due to disablement,maternity and laid off ,leave with wages will be counted ?
I guess what you are trying to understand here is if an employee is entitled for bonus in case of above mentioned reasons.
Yes. He is.
3. which among these are not entitle for bonus
The definition of employee does not differentiate between the daily wager, casual or permanent workmen. All employees falling within the ambit of payment of wages act are entitled to bonus.
apprentice – yes. (Excluding those covered under the apprenticeship act, 1961)
contract labour – yes. However, the liability is Not with the company but the contractor.
temporary staff – assuming they are on company’s role, yes. If he has worked for no less than 30 days in a previous financial year.
seasonal staff – Yes. (pl refer “Shakkar Mills Mazdoor Sangh V. Gwalior Sugar Company Lt., 1985 (50) FLR 320 – seasonal employees are entitled to full minimum bonus guaranteed by the S. 10 and not only the proportionate bonus as u/s 13.
probationers – yes. If he has worked for no less than 30 days in a previous financial year and employed on a monthly wages not exceeding 10000.
4. can we include overtime for calculation of salary for excluding a employee for bonus?
Under sec. 21(i), any other allowance which the employee is for the time being entitled to is excluded. Hence, overtime is not to be factored in for working out bonus eligibility.
Regards,
Chirag B.
From India, Mumbai
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Hi All, I have a doubt, Will the standing order of the company applicable to the Contrcator worker. Most of the time if we see the suprervisor of the company control over the control worker
From India, Gurgaon
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From India, Gurgaon
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Hi,
It depends on the standing order of an establishment. Some establishments may include provisions for contract workers, while others may not. Therefore, we have to check the respective establishment's standing order to make a decision.
With Regards,
Mr. Thumbs Up
From India, Chennai
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It depends on the standing order of an establishment. Some establishments may include provisions for contract workers, while others may not. Therefore, we have to check the respective establishment's standing order to make a decision.
With Regards,
Mr. Thumbs Up
From India, Chennai
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