Am I Entitled to a Bonus After 1 Year and 3 Months at My Company?

I have joined a private limited company on the 7th of July 2014. The company states that I am not entitled to a bonus. I have completed 1 year and 3 months and am still in service. Please clarify whether I am entitled or not.

Please clarify whether I am entitled or not. I have completed 1 year and 3 months, and I am still working there.

Eligibility for Bonus Under the Bonus Act

The Bonus Act applies to any employee whose salary (basic + DA) is less than ₹10,000. If your salary is above that, you are not eligible for a statutory bonus.

If you are eligible, you can receive a bonus of 8.33% to 20% of your annual salary, subject to a salary ceiling of ₹3,500 per month. This means that if your salary exceeds ₹3,500, the bonus would be computed only on ₹3,500 per month.

Bonus is payable to employees who have worked for more than 100 days in the previous year.

In the Payment of Bonus Act, 1965, it is mentioned that "An employee will be entitled only when he has worked for 30 working days in that year" and "Basic+DA <=10,000, they are eligible".

Regards,
B. Nagendra

Understanding Bonus Policies in Organizations

Every organization has its own policy for the payment of bonuses. In general, the payment of bonuses is guided by the Bonus Act, and our friends have cited the conditions of the Bonus Act. However, a few organizations may allow incentive bonuses, profit-sharing bonuses, etc. Therefore, please contact your HR Department and learn about the bonus policy of your organization.

The Payment of Bonus Act states that if an employee's basic salary does not exceed Rs 10,000/- as per the latest amendment, the employee is entitled to a bonus at 8.33% on a wage ceiling of Rs 3,500/-, provided that they have worked in the company for not less than 30 days in a financial year starting from April 1st to March 31st of the preceding year. However, a newly set-up organization/company has a three-year infancy protection under this act, and such a company is not required to pay bonuses to its employees if it does not earn a profit within that period. Nevertheless, upon completing five years, the company must pay a minimum bonus of 8.33% to its employees regardless of whether it is earning a profit or not.

Therefore, if your company has infancy protection under this act and is not making a profit, you cannot claim a bonus as a matter of right. However, if other employees are receiving bonuses, you can approach your HR Department and request to be given a bonus on par with them to resolve the matter amicably. Alternatively, you can submit an application to the Deputy Commissioner of Labor or any labor department officials within whose jurisdiction your company falls to obtain the bonus under the Payment of Bonus Act and the related rules.

Regards,
NVRao
Tanuku,
Andhra Pradesh

When you joined on 7th July 2014, how come you have completed 1 year and 3 months? If you joined in July 2013, then yes, as mentioned by other forum members above, if your salary, i.e., basic + DA, is below Rs. 10,000/-, then only you are eligible for the bonus; otherwise, not.

If your salary criteria match and you joined in July 2014, then you are eligible for the bonus next year and not this year. I hope this clarifies your query.

First of all, I would like to know if there is a bonus amount paid to other employees and not paid to you only because you are not eligible for it.

Bonus Eligibility Criteria

As far as bonus applicability is concerned, there are already a few comments that clarify your eligibility. You must have worked at least 30 days in a bonus calculating year, i.e., April to March. Secondly, you must be getting 'wages' as per the wages defined under The Payment of Bonus Act, 1965, to become eligible to receive the bonus. If your company has declared a certain percentage after computing profit and loss to be distributed as a bonus, you will, of course, be eligible to receive the bonus.

So, please check these conditions with yourself. Perhaps, you will get the answer.

Regards,

Mr. Jitenderdhar, in his query, has not stated his position and the nature of his company. Furthermore, it appears he has not ascertained the issues related to the Payment of Bonus. In the absence of such information, all of us are providing general information. Regards.