Bonus-contract Termination Of Contractor - CiteHR
Saswatabanerjee
Partner - Risk Management
+1 Other

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our institute had paid the bonus sep 2011 to august2012 paid on October 2012. Now the contract is terminating on Dec 2012. Contractor has submitted a bonus bill for september 2012 to November 2012 in decemeber 2012. Whether we can pay the bonus now? or wait till next bonus period(October 2013). Pls advise.

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Dear Najeebvismail,
Bonus would be paid to the regular employees of the contractor based on the profits-allocable surplus- of the employer-contractor. You should be paying the Bonus, if the contract labour works more than 30 days in the respective financial year. However, the bonus for the stipulated (Sep 2012 - Nov 2012) will be paid in the calculated FY only.
HI MADAM, Thank you for ur advice One more clarification pls. What u mean by the calculated Financial year. Whether we can pay right now the bonus or have to wait till next year.
Since the contract is being terminated, the employees are probably going to be terminated also and full and final settlement needs to be done. While be bonus rules allow you to pay it in October 2013, the logistics will be a bright are as he will have to find all of those people and and pay them. All for rs. 600 (approx) each. If he fails to pay, you as principal employer will be liable to pay with interest and penalty.
In fire of all this, it's not worthwhile trying to delay it till October 2013. May as well clear it now
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