Our company pays grade-wise incentives to all its employees. Some of the employees receive bonus as per bonus act & receive their incentives after deducting bonus amount already paid to them. Is this a correct practice followed as per labour laws / bonus act. Since payment of bonus is mandatory.
From India, Thane
Labour Law & Hr Consultant
PL Kanthan

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The query, in my opinion, needs certain additional inputs such as the existence of any agreement or settlement linking bonus with production or productivity, the quantum or the percentage of the incentive amount deducted towards bonus with reference to the total earnings of the employees in the accounting year.
Sec.31A of the Payment of Bonus Act,1965 permits the arrangement for the payment of bonus linked with production or productivity subject to the conditions- (1)that no relinquishment of the employees' right to minimum bonus u/s10 of the Act and (2)that such emp;oyees covered by the settlement shall not be entitled to be paid bonus in excess of 20%.

From India, Salem
PL Kanthan

Dear Seniors,
Here is an input.
As has been the understanding as per Payment of Bonus Act 1965, Clause, contract workers engaged in "Building Operations" are not eligible for Bonus.
For your kind information, this Clause has been withdrawn by Ordinance of Amendment dt Oct.2007. Attached is that amendment.
Kindly stay updated.

From India, Thane

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