Are We Responsible for Paying Bonuses to Contract Workers? Seeking Clarity and Guidance

Dear all,

We have hired an unskilled contractor for housekeeping services. The contractor is charging us a monthly bonus of 8.33%, typically paid annually to employees in October.

I have a few inquiries regarding this matter:
1. Should we be responsible for paying the bonus, or is it the contractor's liability? I believe the bonus should be covered by the contractor's profits and not deducted from the principal employer.
2. I've heard that if a company provides bonuses to all regular employees, the same should apply to contract workers. Could you confirm if this is accurate?
3. If the bonus payment is the responsibility of the principal employer, what specific documents should we request from the contractor, such as a bonus payment slip, etc.?

Your guidance on this matter would be greatly appreciated.

Best regards,
Priyanka

Hi Priyanka,

If your company is paying a monthly bonus to the contractor, then you have to ask them to pay the bonus to their employees. It is the total liability of the contractor, but you have to ensure this because you are paying on a monthly basis.

For this, you can ask for a bonus register "C" in which the bonus has to be distributed. Also, you can ensure that the contractor will distribute the bonus amount in the presence of the HR representative of your company.

Regards,

L.C. Pal
9811444654

Dear Mr. Pal,

Thank you for your reply. It's really very helpful. One thing I would like to know is whether the payment of bonus is the principal employer's responsibility or the contractor's responsibility?

Regards,
Priyanka

Hello,

During full and final settlement before October, the contractor is not settling the bonus of the workers. Could you kindly confirm under which section of the Payment of Bonus Act/CLRA Act/any other act it is mentioned that the bonus should be settled during full and final settlement before October, or should it be settled later? If not, the said amount should be deposited with the applicable fund. What is the proof of persons receiving the bonus if they have resigned before October?

Regards,
Nirupa