Can Employees Leaving Early Still Claim Their Annual Bonus? Let's Discuss

Eligibility for Annual Bonus Upon Early Departure

If an employee who has been working in the company for more than three years suddenly leaves before the month of the annual bonus, can the employee request the yearly bonus? It should also be noted that the bonus was not deducted from the salary on a monthly basis.

Please reply.

Thanks

If an employee will be leaving the company by August 13 and our bonus is calculated from April to March, then he will be eligible for the bonus in August 13, not for the whole year.

Regards

If the bonus period is from December to January, and an employee leaves in October without serving the notice period, what happens in that case?

We will pay the bonus on the last working day. For example, if today is my last working day, which is 18-02-13, and tomorrow, 19-02-2013, I will be leaving the company without prior intimation or serving the notice period, my bonus will be calculated as of 18th February 2013. You need to calculate the bonus until September (meaning up to the last working day of the employee).

Thank you.

If you are talking about "statutory bonus," then your company is liable to pay the bonus to the employee who has left, as we calculate the bonus from April to March and disburse it by November of the next financial year. Please find further clarification on your queries regarding the payment of the bonus amount:

Time Limit for Payment of Bonus: Sec-19

- Within 8 months from the close of the accounting year.

Explanation

- Bonus is payable within 8 months from the close of the accounting year (31st March), so the bonus is required to be paid by 30th November. (For FY 12-13, the bonus should be paid by 30th Nov 2013).

Hence, your employer is not wrong as they are saying they will disburse the bonus around Diwali. Hope you got all the answers.

Regards

It doesn't matter whether you show the bonus on the salary slip or not. You have to pay the bonus if the employee has worked more than 30 days in the eligible period for the bonus. If the employee has not served the notice period and is absconding without completing clearance, then you can hold the bonus. When they come to claim the bonus, ensure the clearance is done and issue the bonus.

Bonus Calculation and Payment

Bonus is calculated after the balance sheet is prepared (after analyzing profit). The balance sheet cannot be calculated based on the calendar year, so the bonus should be calculated based on the financial year. You can pay the bonus in the calendar year if you have an agreement with the union or if your percentage is fixed. Otherwise, it is paid in the financial year.

Regards,
Arun J.

Employee is eligible for a bonus if they fulfill the points mentioned below at the time of bonus distribution. If an employee leaves the organization before the bonus distribution as prescribed in the act, they can claim the same from the organization within three years.

• Every employee shall be entitled to be paid by their employer a bonus in an accounting year, in accordance with the provisions of this Act, provided they have worked in the establishment for not less than thirty working days in that year. (Section 8)

• Where an employee has not worked for all the working days in any accounting year, the bonus payable to them under Section 13 shall be proportionately reduced.

Regards

According to Sec 8 of the Payment of Bonus Act, 1965

Eligibility for Bonus—Every employee shall be entitled to be paid by their employer in an accounting year, a bonus, in accordance with the provisions of this Act, provided they have worked in the establishment for not less than thirty working days in that year.

And Sec 13 of the Payment of Bonus Act, 1965

Employee Definition—An employee is any person (other than an apprentice) employed on a salary or wage not exceeding ten thousand rupees per mensem in any industry to do any skilled or unskilled manual, supervisory, managerial, administrative, technical, or clerical work for hire or reward, whether the terms of employment be express or implied.

So, depending upon the designation and salary, you can issue the bonus proportionately for the period of working days in the last year.

Regards,
Sam

Eligibility for Bonus Payment Under the Payment of Bonus Act, 1965

If an employee has worked for more than thirty (30) days in a financial year, they shall be eligible for the payment of a bonus under the Payment of Bonus Act, 1965. A bonus can be forfeited under Section 9 for committing fraud, theft, misappropriation, or sabotage of any property of the establishment, including riotous or violent behavior while on duty. The quantum of the bonus is decided by the employer after computing the gross profit, taking into account the allocable and available surplus as per the First or Second Schedule of the Act.

My friend Akhil Gupta has rightly mentioned that the payment of the bonus has to be made within eight months from the close of the accounting year. The minimum bonus has been prescribed as 8.33%, and the maximum is 20% under Sections 10 and 11 of the Act. This condition has been relaxed for certain establishments, as given in Section 16 of the Act.

Regards,
BS Kalsi
Member

Akhil is right. First of all, clarify whether it is a statutory bonus or ex-gratia. That is the only clarification that can be made.

Thanks & regards,
Sumit Kumar Saxena

If the said employee is receiving a basic salary of up to Rs. 10,000 per month and has worked for a minimum of 30 days during the financial year for which the bonus is to be calculated, then he is eligible for the bonus to be calculated up to his date of leaving. He can claim the same when the bonus is disbursed. The disbursement of the bonus is to be made within 8 months from the date it becomes payable.

Thanks

Hi all,

If any employee worked from December 2014 to June 2016 and left the company in July, is he liable for the annual performance bonus for the past year until March 2016?