Hello, Can dues from employee like excess salary paid or notice period recovery be adjusted against Statutory bonus or gratuity payable to employee
From India, Noida
Acknowledge(0)
Amend(0)
2From India, Noida
Acknowledge(0)Amend(0)
Other than Section 18 employer can not deduct the Bonus Amount.
Section 18 - Payment of Bonus Act . Deduction of certain amounts from bonus payable under the Act. –
Where in any accounting year, an employee is found guilty of misconduct
causing financial loss to the employer, then, it shall be lawful for the employer to
deduct the amount of loss from the amount of bonus payable by him to the
employee under this Act in respect of that accounting year only and the
employee shall be entitled to receive the balance, if any.
From India, Pune
Acknowledge(0)Amend(0)
Section 18 - Payment of Bonus Act . Deduction of certain amounts from bonus payable under the Act. –
Where in any accounting year, an employee is found guilty of misconduct
causing financial loss to the employer, then, it shall be lawful for the employer to
deduct the amount of loss from the amount of bonus payable by him to the
employee under this Act in respect of that accounting year only and the
employee shall be entitled to receive the balance, if any.
From India, Pune
Acknowledge(0)Amend(0)
From gratuity you can, with proper substantial documents stating that the employee is due to the company like excess paid salary or advance dues etc
From India, Hyderabad
Acknowledge(0)Amend(0)
From India, Hyderabad
Acknowledge(0)Amend(0)
Dear Ganesh,
Since the contingency of adjustment of the dues mentioned has become coincidental with the F&F Settlement of the employee on his termination of employment, I feel that the brief answer of our learned friend Mr. Prashant B. Ingawale needs further elaboration and explanation as well. Deductions from wages by the employer are permitted only in respect of the kinds enumerated in S.7 of the Payment of Wages Act, 1936. Therefore, it is pertinent to analyze first whether the statutory bonus and gratuity against which you intend to adjust the excess salary paid or notice period recovery could be construed as "wages" as defined under the PW Act, 1936 and secondly whether those items proposed to be deducted fall in the exhaustive list enumerated u/s7 of the Act.
Clauses (e)(1) and (6) of Section 2 of the PW Act, 1936 explicitly exclude bonus and gratuity, respectively, from the definition of wages. Therefore, even if the items proposed to be recovered from the employee on the eve of his termination fall within the list enumerated u/s 7, the employer cannot make any adjustment towards such items from bonus and gratuity.
Such being the position, the next option before the employer is to see whether these items are deductible from the statutory bonus or gratuity under the Payment of Bonus Act, 1965, and the Payment of Gratuity Act, 1972 respectively. S.18 of the PB Act, 1965 prescribes the deduction of certain amounts from the bonus payable under the Act. It is only the proportionate amount of loss caused by any misconduct by the employee during the Accounting Year only. S.4(6) of the PG Act, 1972, which contemplates the partial or total forfeiture of gratuity of an employee, would also not be helpful to the employer as the termination of employment is based on no misconduct of the employee.
Therefore, you cannot adjust the items of excess salary paid or notice period recovery against the statutory bonus or the gratuity payable.
From India, Salem
Acknowledge(0)Amend(0)
Since the contingency of adjustment of the dues mentioned has become coincidental with the F&F Settlement of the employee on his termination of employment, I feel that the brief answer of our learned friend Mr. Prashant B. Ingawale needs further elaboration and explanation as well. Deductions from wages by the employer are permitted only in respect of the kinds enumerated in S.7 of the Payment of Wages Act, 1936. Therefore, it is pertinent to analyze first whether the statutory bonus and gratuity against which you intend to adjust the excess salary paid or notice period recovery could be construed as "wages" as defined under the PW Act, 1936 and secondly whether those items proposed to be deducted fall in the exhaustive list enumerated u/s7 of the Act.
Clauses (e)(1) and (6) of Section 2 of the PW Act, 1936 explicitly exclude bonus and gratuity, respectively, from the definition of wages. Therefore, even if the items proposed to be recovered from the employee on the eve of his termination fall within the list enumerated u/s 7, the employer cannot make any adjustment towards such items from bonus and gratuity.
Such being the position, the next option before the employer is to see whether these items are deductible from the statutory bonus or gratuity under the Payment of Bonus Act, 1965, and the Payment of Gratuity Act, 1972 respectively. S.18 of the PB Act, 1965 prescribes the deduction of certain amounts from the bonus payable under the Act. It is only the proportionate amount of loss caused by any misconduct by the employee during the Accounting Year only. S.4(6) of the PG Act, 1972, which contemplates the partial or total forfeiture of gratuity of an employee, would also not be helpful to the employer as the termination of employment is based on no misconduct of the employee.
Therefore, you cannot adjust the items of excess salary paid or notice period recovery against the statutory bonus or the gratuity payable.
From India, Salem
Acknowledge(0)Amend(0)
Dear Sir,
Referring to your query, the suggestion given by Mr. Umakanthan is always appropriate. You cannot adjust excess salary paid or deductions of the amount under the notice period in F & F Settlement against the sums received under Bonus & Gratuity by the employee. You can forfeit the amounts of Bonus & Gratuity in certain conditions as clearly stated by Mr. Umakanthan.
Thanks & Regards,
V R RAO PULIPAKA.
From India, Chennai
Acknowledge(0)Amend(0)
Referring to your query, the suggestion given by Mr. Umakanthan is always appropriate. You cannot adjust excess salary paid or deductions of the amount under the notice period in F & F Settlement against the sums received under Bonus & Gratuity by the employee. You can forfeit the amounts of Bonus & Gratuity in certain conditions as clearly stated by Mr. Umakanthan.
Thanks & Regards,
V R RAO PULIPAKA.
From India, Chennai
Acknowledge(0)Amend(0)
Dear All,
I have observed, with pain, that some members are commenting on issues without sufficient knowledge of the same. Kindly note that this is a professional forum, and one is expected to comment only if one has reasonable knowledge of the same. Issues of laws and compliances are very tricky, and any unprofessional, off-the-cuff advice can put the other person in serious trouble! I therefore request all such gentlemen to maintain the decorum of this forum and avoid the temptation of commenting on subjects of which they have no knowledge.
Anil Raina
From India, Delhi
Acknowledge(0)Amend(0)
I have observed, with pain, that some members are commenting on issues without sufficient knowledge of the same. Kindly note that this is a professional forum, and one is expected to comment only if one has reasonable knowledge of the same. Issues of laws and compliances are very tricky, and any unprofessional, off-the-cuff advice can put the other person in serious trouble! I therefore request all such gentlemen to maintain the decorum of this forum and avoid the temptation of commenting on subjects of which they have no knowledge.
Anil Raina
From India, Delhi
Acknowledge(0)Amend(0)
Dear Ganesh,
Deduction from bonus! No.
But it can be, if any dues are shown as advance payable under bonus or any amount settled against the employee for being found guilty of misconduct causing financial loss to the employer.
Regards
From India, Mumbai
Acknowledge(0)Amend(0)
Deduction from bonus! No.
But it can be, if any dues are shown as advance payable under bonus or any amount settled against the employee for being found guilty of misconduct causing financial loss to the employer.
Regards
From India, Mumbai
Acknowledge(0)Amend(0)
Sir, we are a Government of India autonomous body. We have engaged casual workers through a labor contractor. We normally paid Non-Productivity Linked Bonus scheme (ad-hoc bonus) last year, which was Rs. 1188/- as per the Central government order. Now, our workers are demanding 8.33% of wages. Is it applicable for us? The amount is fixed at Rs. 7000/-. Please clarify.
From India, Palakkad
Acknowledge(0)Amend(0)
From India, Palakkad
Acknowledge(0)Amend(0)
Dear Bijoy,
The Payment of Bonus Act, 1965 is not applicable for your organization, i.e., we are a Government of India autonomous body. Further, your query is regarding the payment of bonus to casual employees.
Please let us know whether regular employees of your organization are eligible for a bonus? What is paid to regular employees needs to be paid to casual employees as well.
From India, New Delhi
Acknowledge(0)Amend(0)
The Payment of Bonus Act, 1965 is not applicable for your organization, i.e., we are a Government of India autonomous body. Further, your query is regarding the payment of bonus to casual employees.
Please let us know whether regular employees of your organization are eligible for a bonus? What is paid to regular employees needs to be paid to casual employees as well.
From India, New Delhi
Acknowledge(0)Amend(0)
Dear Bijoy,
Just because an institution is an autonomous body of the Government of India, I am unable to accept the premise that it will not be covered by labor laws of the land. Institutions like AIIMS, CSIR, etc., are granted autonomous status only for the sake of self-governance facilitating the achievement of the specific purposes for which they are created. Therefore, please furnish the activities of your organization.
From India, Salem
Acknowledge(0)Amend(0)
Just because an institution is an autonomous body of the Government of India, I am unable to accept the premise that it will not be covered by labor laws of the land. Institutions like AIIMS, CSIR, etc., are granted autonomous status only for the sake of self-governance facilitating the achievement of the specific purposes for which they are created. Therefore, please furnish the activities of your organization.
From India, Salem
Acknowledge(0)Amend(0)Engage with peers to discuss and resolve work and business challenges collaboratively - share and document your knowledge. Our AI-powered platform, features real-time fact-checking, peer reviews, and an extensive historical knowledge base. - Join & Be Part Of Our Community.
Amendment to Payment of Bonus Act 2015.jpg
Statutory Compliance of a Industrial or Commercial Unit.xls
Bonus act amendment gazette copy.pdf