Dear All,
What will be the liability of principal employer if a contractor is paying only 8.33% bonus to his employees even if he is in profits and capable to make the bonus payment on 20% ?.
As per the Payment of Bonus Act, 1965 every employer (including contractor) should assess his financial capability of paying the bonus through Form A & B and the bonus percentage should be derived accordingly. But in majority of the cases contractors not even bother to make the Form A & B and pays the minimum bonus of 8.33%.
I will be really thankful If anyone can provide any judgement in this regards.
Thank you.
Arshad Khan

From India

Asso.Prof.(Commerce & Management)
The responsibility on the part of Principal Employer is to the extent of a minimum bonus of 8.33%. The 20% is the maximum limit which only could be ascertained & declared by the direct employer, the contractor. It's not practical for the PE to impose certain higher %age of bonus arbitrarily. Your version of higher profitable can be refuted by the concerned. Unless the workers involved raise a dispute or resort to agitation nothing concrete could be expected.
From India, Bangalore
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