Payment of Bonus to Contract workers - loading the bonus component to the minimum wages payable - CiteHR
Industrial Relations And Labour Laws
Legal Counsel
Hr & Admn. Executive

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In one of the workshops related to the contract labour management, one speaker has queried if the contract labour is eligible for bonus or not? The question was raised in light of the fact that payment of Bonus act does not specifies for payment to Contract labour. Further the CL(R&A)Act also is silent on payment of Bonus.
In our organisation we are loading the bonus component to the minimum wages payable and wages as such is paid to the contract labour.
However, may request our friends to opine on the subject.
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Why do you pay bonus to your contractors employees who are engaged in your establishment? Bonus should be paid by the Contractor and as far as you are concerned you have just to ensure that bonus has been paid to all employees of the contractor who are eligible for bonus. If you find that contract employees are not paid bonus then you can intervene and arrange to give bonus either by instructing the contractor or by yourself directly pending recovery from the contractor.
Now, the practice of you fixing the wages of contractors' employees is very dangerous. If you fix it, that means your relationship with the contractor's employees is employer and employee and if so, the contract employees can claim for employment in your establishment.
Again, it is not by adding bonus or other variable that you should make the wages as per Minimum Wages Act.
We pay bonus to contract labours but how to ensure that the bonus is being paid to all the contract employees. As the contractors gives us bonus working for all his contract workers who have worked in the organisation under his contract for more than 30 days but those who have left working 30 o 30+ days leave the job and contractor too dont pay but by any way he submits us the bonus disbursement statement by showing signatures of receipt of bonus by the contract employees that are fake.
You have to instruct the contractor to disburse the payment of bonus in presence of authorized representative of Principal employer.
Dear All, Could you clarify whether the contractor labour is eligible for Bonus under payment of bonus act if yes- who has to pay and is it compulsory? rns
Primarily it is the obligation of the contractor to pay bonus to his workers. Regards, Madhu.T.K
Contract labour are not employees of the Contractor.They are a special category who acquire the status of 'contract-labour' under the Contract Labour Act-1971.If they were the employees of the Contractor they would be eligible for bonus, gratuity, retrenchment-compensation etc as the normal employees of an employer would be entitled to.But 'contract-labour' are a special species who trace their origin and existence under the Contract-labour Act.Therefore they arre entitled to only those benefits as are specified for 'contract-labour' in the Act which are wgaes,PF & ESI.Nothing more nothing less.
HI, I have a doubut, if we add bonus to the monthly wage, just to increase their net, will this bonus component attract the ESI? Chaitra
Yes, it will attract ESI since all payments made in an interval of not more than two months will be treated as part of wages. Madhu.T.K
There are 2 contrary views presented in above posts. Can somebody please confirm whether contract workmen should be paid bonus by the contractor or not?

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