Madhu.T.K
Industrial Relations And Labour Laws
Saswatabanerjee
Partner - Risk Management
Boss2966
Industrial Relations
Nhsrikanta
Accounts & Finance
Korgaonkar K A
Ba,llb,mpm,dir&pm,dll&lw,d.cyber
+1 Other

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We have to pay Left Employee Bonus amounts which has been send through RPAD.
but due to change in address or wrong address it has been returned.
What is the further procedure to pay out the same.
Should it be deposited to Labour Welfare dept.?
How long we can keep the amount in our books?
Any rules/notifications available for this issues.
Please help to get detiails

From Japan, Tokyo
There is no such provision in the Payment of Bonus Act. If the person demanding the bonus had worked in the establishment during the bonus period is not traceable then you can keep it for one or two years in unclaimed bonus to employees account and then later on write back to revenue. You need not send the amount by post or need not go in search of a left employee as in the case of payment of gratuity where it is mandatory for the employer to pay it within one month. Under the Payment of Bonus Act any claim for bonus should be made within one year of its due date for payment. Therefore, if there is no claim for bonus, we can write it back.
Madhu.T.K

From India, Kannur
Madhu,
From what I know,
Bonus is a component of salary under payment of wages act.
Therefore, if the amount if bonus is not paid, the same must be specified in the unclaimed bonus register and after 3 years it needs to be deposited with the labour welfare fund.
You are not allowed to write it back

From India, Mumbai
Dear Nhsrikanta,
I endorse Madhu ji, except his last sentence, with due respect to him. I endorse Saswata ji and would like to do value addition to the responses by both- Madhu ji & Saswata ji as under:
The Bonus amount of ex-employees is unpaid with the company. This unpaid accumulation alongwith other unpaid accumulation of wages etc., company should keep it in unpaid register / unpaid account till such period it is not transferred to LWF of State Government. Most of the States has this provision. Once the unpaid accumulation amount is transferred to LWF and any claim is received by company, the company should direct the claimant to LWF authority.
Most of the States has provision to transfer the unpaid accumulation after three years.

From India, Mumbai
Thank you all for your needful information.
I am from karnatka state, and under stood from the above statement is we need to deposit unpaid bonus/wages with in 3 years to the LWF department.
Is there any case laws / notificaiton reference in this regards. i have gone through the rule no where it says about it.
Srikanta

From Japan, Tokyo
It's not there as a single provision
You have to see a combination of provisions that result in the same effect.
Sec 3(vi) of payment of wages act has the definition of wages. It excludes bonus unless it forms a part of the remuneration payable under the terms of employment or which is not payable under any award or settlement between the parties or order of a Court;
So bonus is a part of payment of wages act in most cases
Once bonus is a part of wages, the rules applicable to unpaid wages applies here too.

From India, Mumbai
Dear Srikanta ji, Please read section 3 and section 7 of Karnataka Labour Welfare Fund Act 1965 which deals with Welfare Fund & unpaid accumulations respectively.
From India, Mumbai
As per Payment of Wages Act, bonus is not a part of wages. No Act has included the same as part of wages or salary.
Please tell me under which section of the Payment of Bonus Act or under which rule under the Payment of Bonus Rules, has it made mandatory that we should keep the unclaimed bonus account for three years and thereafter deposit the same with government.
Usually, provision for bonus inn the balance sheet is made after considering the existing provision, ie, is amount remaining unpaid in the bonus provided account. The same will have the effect of it writing back. Correct me if I am wrong.
Madhu.T.K

From India, Kannur
Madhu Please refer to my post a hour back. I have stated why I think bonus is a part if wages in most cases. Please let me know if I am wrong in the interpretation.
From India, Mumbai
Dear Madhu ji,
With due respect to you Sir, my submission is as under:
You are absolutely correct. In fact, the definition of wages under POW Act clearly exclude Bonus as Wages.
There is no provision in POB Act. However, LWF Acts of various States define Unpaid Accumulation as and means all payments due to employees but does not made to them with in a period of 3 years. Those Acts also define Wages in which there is no exclusion of Bonus.
I think you are making a mistake.

From India, Mumbai

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