I have joined a new organization. Our organization paying a statutory bonus of rs. 8000 to each permanent worker irrespective of their actual wages which is much higher than rs 8000. Actually, there is a settlement with the union that for bonus calculation the bonus will be considered as if it a fixed Rs.8000 for each workman.
my question is although if there is an agreement/ settlement, paying fixed Rs.8000 is not a violation of the bonus act.

From India, Konnagar

Section 34 of the Payment of Bonus Act,1965 holds that agreements inconsistent with the provisions of the Act are null and void.
However, without going through the wage structure of your employees and the statutory minimum rates of wages applicable, it may not be possible to give a right answer to your question.

From India, Salem
sir, thanks for the reply the wage of the permanent workmen have only two-components Basic+DA and the avg. wage is 12000/-
From India, Konnagar

The amount payable will be the higher of the bonus due under payment of bonus act and the bonus agreement with the union. So, those who are earning more than ₹ 8,000 per month, you are definitely in violation of the law.

Also remember that bonus can be at 20% of annual wages, so in that case, paying 8,000 is invalid anyway.

From India, Mumbai

Further to what Mr. Umakanthan.M post, I would like to add the followings:-

1. Bonus is paid based on Available Surplus, Allocable Surplus, Set on & Set off.

2. The quantum of Bonus may vary between 8.33% and 20% based on Net .Allocable surplus amount.

3. Calculation of Bonus amount will be based on Minimum wages or 7000/- whichever is higher.

4. The quantum of Bonus in absolute value will be either any % ( Range 8.33 to 20 ) of (7000*12) or ( Minimum Wages *12 ) which ever is higher.

5. Organization may pay Bonus beyond the Bonus Act and better to pay the extra amount as exgratia instead of bonus.

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
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