Dear All HR Professionals,
I have recently joined a firm as an HR Executive. I observed the following facts:
• The unit is new and has not been profitable in its second year of operation.
• The unit employs permanent labor.
• The unit did not make a provision in the Balance Sheet of the previous year for the payment of bonuses.
• The appointment letters issued by the unit mention that the bonus amount is part of the CTC.
I have a few questions:
1. Is the new unit liable to pay bonuses?
2. Would it be considered discriminatory if the unit does not pay the bonus?
3. If the unit did not make a provision for bonuses in the previous year's Balance Sheet, can it still pay bonuses to staff/workers?
I would greatly appreciate the views of fellow members on this matter.
From India, New Delhi
Acknowledge(0)
Amend(0)
10I have recently joined a firm as an HR Executive. I observed the following facts:
• The unit is new and has not been profitable in its second year of operation.
• The unit employs permanent labor.
• The unit did not make a provision in the Balance Sheet of the previous year for the payment of bonuses.
• The appointment letters issued by the unit mention that the bonus amount is part of the CTC.
I have a few questions:
1. Is the new unit liable to pay bonuses?
2. Would it be considered discriminatory if the unit does not pay the bonus?
3. If the unit did not make a provision for bonuses in the previous year's Balance Sheet, can it still pay bonuses to staff/workers?
I would greatly appreciate the views of fellow members on this matter.
From India, New Delhi
Acknowledge(0)Amend(0)
By looking into this case, as per my knowledge, a new company is given an exemption for up to 3 years regarding whether it pays bonuses or doesn't pay bonuses as per "The Payment of Bonus Act, 1965" to the employees. As we know, no company can make profits in the early years other than in extreme scenarios. Therefore, after the completion of 3 years and having the relaxation of bonuses, the Company/Industry/Factory should pay bonuses to their Employees/Workers as per the "Payment of Bonus Act," even if they are making losses or profits. It may extend its bonus payments to Employees/Workers if it promises to pay the total bonus at once at regular intervals and obtains approval from the government by issuing a notification in the Official Gazette.
From India, Hyderabad
Acknowledge(0)Amend(0)
From India, Hyderabad
Acknowledge(0)Amend(0)CiteHR is an AI-augmented HR knowledge and collaboration platform, enabling HR professionals to solve real-world challenges, validate decisions, and stay ahead through collective intelligence and machine-enhanced guidance. Join Our Platform.
Amendment to Payment of Bonus Act 2015.jpg
Bigger bonuses for more as Lok Sabha amends Payment of Bonus Act - The Economic Times.pdf
THE PAYMENT OF BONUS ACT.doc