Can We Use Different Bonus Percentages for Employees Under the Bonus Act 1965?

Dear seniors, I need one clarification under the Payment of Bonus Act. We have 150 employees, and the payment bonus percentages range from a minimum of 8.33% to a maximum of 20%. My question is: can we calculate the bonus percentage the same for all employees or use different percentages?

1. "A" employee having 8.33%
2. "B" employee having 12%
3. "C" employee having 11%

We have followed this method. Please let me know if it's legally correct.

Dear Mr. Aditya, which type of question is that one? You just keep that calculation matter aside and tell me, what is the need to differentiate the employee that is the Bonus, not Variable pay. Bonus is given based on their performance. Please let me know. It's not a good practice.

For those employees whose performance or attendance records are not good, restricting the bonus to a minimum of 8.33%. For those whose performance is better, it can be slightly higher based on the numbers, right?

One cannot make any discrimination in the payment of bonuses. However, it is possible to address this at the time of appraisal. Please ensure the minimum 8.33% bonus is paid to all employees and declare the Ex gratia amount based on their performance. In Ex gratia, discrimination can be based on performance, and no one can question it. However, in bonuses, you cannot discriminate.

I agree with Sh. Bhaskar, our Super Moderator, that we cannot have discrimination in the payment of bonuses under the Payment of Bonus Act, 1965. An "employee" under Section 2(13) is defined as 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 are express or implied. As such, you are free to decide any amount in the form of ex-gratia to employees drawing a salary of more than Rs 10,000 per month. Any discrimination in the payment of bonuses otherwise would be illegal and unjustified.

Regards,
BS Kalsi
Member since Aug 2011