Subject: Bonus Act Query for Shops and Establishment
Respected Sir,
Need your expert advice on the query related to the Bonus Act.
We are 60 employees and registered under the Shops and Establishment Act, Karnataka. There are 5 employees who come under the Bonus Act, i.e., earning less than 21,000/-. For other employees, we follow the Gross concept - wherein incentives or variables are not given.
Query 1: How is the allocable surplus to be considered? Is the entire amount only for 5 employees, or should they get only a proportion based on the annual CTC of the employees?
Query 2: Re: New labor codes - are they implemented for Karnataka?
Thank you in advance.
From India, Delhi
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Respected Sir,
Need your expert advice on the query related to the Bonus Act.
We are 60 employees and registered under the Shops and Establishment Act, Karnataka. There are 5 employees who come under the Bonus Act, i.e., earning less than 21,000/-. For other employees, we follow the Gross concept - wherein incentives or variables are not given.
Query 1: How is the allocable surplus to be considered? Is the entire amount only for 5 employees, or should they get only a proportion based on the annual CTC of the employees?
Query 2: Re: New labor codes - are they implemented for Karnataka?
Thank you in advance.
From India, Delhi
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Answering the queries on the basis of the Payment of Bonus Act 1965, the legal position is as follows:
1. The available surplus gets divided between the eligible five employees subject to the ceiling of 20% to each employee. Any leftover amount gets carried over to the succeeding year subject to a limit of three years. Thereafter, the employer is at liberty to stop crediting it for bonus purposes.
2. The New Labour Code is yet to be implemented anywhere in India.
From India, Mumbai
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16551. The available surplus gets divided between the eligible five employees subject to the ceiling of 20% to each employee. Any leftover amount gets carried over to the succeeding year subject to a limit of three years. Thereafter, the employer is at liberty to stop crediting it for bonus purposes.
2. The New Labour Code is yet to be implemented anywhere in India.
From India, Mumbai
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Employees covered under the Bonus Act should be based on Basic and DA, not on monthly gross. Moreover, a bonus is a deferred wage, which means the bonus for the previous accounting year will be paid in the following accounting year within 8 months of the completion of the accounting year. Therefore, those whose last year's basic & DA is less than or equal to 21,000/- will be eligible for a bonus.
What Mr. KK!HR has mentioned is almost right, except the available surplus will be allocable surplus (a certain % of available surplus), and the leftover amount will be carried forward, subject to a maximum of 20% of the payable bonus, not the entire leftover amount.
S K Bandyopadhyay (WB, Howrah) CEO-USD HR Solutions +91 98310 81531
USD HR Solutions – To strive towards excellence with effort and integrity
From India, New Delhi
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What Mr. KK!HR has mentioned is almost right, except the available surplus will be allocable surplus (a certain % of available surplus), and the leftover amount will be carried forward, subject to a maximum of 20% of the payable bonus, not the entire leftover amount.
S K Bandyopadhyay (WB, Howrah) CEO-USD HR Solutions +91 98310 81531
From India, New Delhi
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