Understanding the Bonus Act: Are Employees in Direct Contact with Employers Eligible for Statutory Bonuses?

Dear CiteHR members, kindly enlighten me on the Bonus Act. Are the employees who are in direct contact with the employer eligible for a statutory bonus?

In addition to Prashant, every employee employed directly or indirectly and who has completed 30 days in the financial year is eligible for the bonus. The minimum bonus at 8.33% must be paid whether the company is earning profits or not, and it is subject to a maximum of 20% of Rs 3500.00. In other words, the minimum bonus would be: Rs 3500.00 * 8.33% * 12 months = Rs 3500.00, and the maximum bonus would be: Rs 3500.00 * 20.00% * 12 months = Rs 8400.00.

Compliance Requirements

For compliance, Register A, B, C, and D are required to be maintained.

If the amount is considered as Basic + DA, then it would be above the 10,000 bracket. Therefore, it will not be eligible for a bonus under the Act. Correct me if I am wrong.

My question is, if I leave the company after the start of the financial year, will I be eligible for a bonus from the previous company?

Many thanks,
Indra

Below are the points that can clarify all the above queries:

1) If you are being charged by a consultant, it will not be covered under the Bonus Act. It will not be considered as a salary but rather a professional charge.

2) To be eligible for a bonus, you must complete at least 30 days of service in a financial year (regardless of when you leave the service).

3) All permanent and contract employees are eligible for a bonus if they are on the payroll, and their Basic + DA is less than ₹10,000 per month.

Regards,
Madan Nayak
Bangalore

[QUOTE=Prashant B Ingawale;1629890]Where employees' Basic + DA is less than 10,000.00, they are covered under the Bonus Act.

Could you please confirm if employees with more than 10,000.00 are not eligible for a bonus? Also, what is the meaning of Ex-gratia?

Abhay

Would you confirm if employees with a basic salary of more than $10,000.00 are eligible for a bonus? Also, what does Ex-gratia mean?

Regards,
Abhay