Anonymous
In an organization, we have employees falling under the Bonus Act as per the ceiling limit and employees who are not falling under Bonus Act as their Basic is more than the ceiling Limit. Now the company wants to pay bonuses for employees like a Statutory Bonus of 8.33% to employees falling within the ceiling limit and 15 % bonus to its employees whose basic is more than that of the ceiling limit.
Can we differentiate and pay different percentages to the employees or not? Kindly guide me

From India, Hyderabad
Though Minimum Bonus of 8.33% has to be distributed for eligible employees, For other exempted employees, it is a customary practice to distribute the same percentage to maintain industrial harmony. In some companies, when different rate of percentage distributed for employees working in the same company dispute were raised and the conciliation officers suggested to maintain same percentage for all employees.
From India, New Delhi
Who tells you that the statutory Bonus is 8.33%. As per PB Act every organizations needs to calculate Bonus as per schedule mentioned in the PB Act considering Gross Profit, Available surplus, allocable surplus, set on & set off. In absence of any allocable surplus and no set on, the minimum Bonus 8.33% has to be paid. Bonus % may vary from 8.33% to 20% and if no Allocable surplus then the the entire Bonus amount will be Set Off and if the Bonus is 20% and there is more allocable surplus then subject to maximum 20% will be Set on.

Majority Indian Organizations without calculation % of Bonus on the basis of PB Act just pay 8.33% as if that is the statutory norms. This is absolutely wrong and as per PB Act it is not permissible.

Your Organization if paid bonus 8.33% as per PB Act which means the company has no allocable surplus. Then how the organization will pay 15% to other employees?

Moreover, what Mr. Kumeracme has been mentioned about industrial harmony is also very vital point.

Please check your system and better to pay equal % of Bonus to all employees across the board.

S K Bandyopadhyay ( WB, Howrah)
CEO- USD HR Solutions
+91 98310 81531
USD HR Solutions – To Strive towards excellence with effort and integrity

From India, New Delhi
Per se, there is no rule that says different classes of employees can not be paid different rate of bonus, as long as everyone covered under the Payment of Bonus Act is paid the amount statutorily due to them
The practice in many companies is to pay bonus as per law and then pay additional amounts as "Ex-Gratia"
But please ensure the management understands the resentment of employees who are paid lesser salaries and on top of that, getting lower bonus also. This may have its own problems at a later date.

From India, Mumbai
Dear colleague,
By intending to pay two rates of bonus for covered and uncovered employees, particularly at higher percentage to uncovered , you are inviting industrial unrest .
You must think of proper justification for this distinction. In the matter of payment of bonus generally all employees are treated equally as everyone contributes to the profitability.
Therefore, any different treatment in this matter between two sets of employees is bound to be viewed as unjust discrimination and May not stand the test of law.
Regards,
Vinayak Nagarkar
HR and Employee Relations Consultant

From India, Mumbai
In a n organization there two categories of employee i.e. eligible and non-eligible falling under the Payment of Bonus Act as per the ceiling limit of wages to receive bonus @8.33% minimum or 20% maximum.
The act does not deny to pay other employees those who are not falling under Bonus Act. The payment by the employer in this regard is not Bonus but termed as Ex-gratia or Festival Gift in lumpsum or an amount decided by the management. Therefore, there is nothing wrong is involved in payment because it is a welfare measure. This category of employee can not raised any objection under law for bonus or can not demand 20% but appeased with any amount the employer pays them.

From India, Mumbai
Dear colleague,
I beg to differ with Prabhat.
Just because one set of employees fall outside the Bonus Act, what is the justification for paying them bonus under any other name at higher rate?. Will it not tweak the principle of fairness and equity? The question is not whether
the management can do so but should management do so?
Regards,
HR and Employee Relations Consultant

From India, Mumbai

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