How Should We Legally Pay Bonuses to Former Employees Who Have Left the Company?

Good afternoon to all.

I am Subodh Mudgal, working in a manufacturing company, and I want to know what the provision is in the bonus act for employees who have left the company. For example, a person who has worked in a company from June 2006 to April 2007, how can we pay the bonus to the former employee? Should we send a cheque to their permanent address or ask them to come to the company to collect the bonus amount, or is there another preferred method? What is the liability of the company for unpaid bonuses? Please tell me the legal way and mode of payment of bonuses to be paid to former employees.

You can pay him the bonus either by cheque or by cash as you think suitable. But you should get a receipt of the bonus from that employee. There is no provision for this.

Thanks,
Raj

Hi,

I would suggest that you make the payment through the payroll with the final settlement or by asking the individual to collect it personally.

Regards,
Sathiya

Dear
The Bonus Act ceiling has been raised w.e.f 2007-2007.It is Management has a duty to send it. Prepare a DD and send it by RPAD or send a letter asking the person to come over if he is available locally.But for out station persons you have to send it by post.Once the DD is posted your liability ends.
with kind regards,
V.Sounder Rajan
Chennai – 600 001.
E-mail :
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,

Dear All,

Please help me with the calculation of bonus. If an employee is absent for 7 days in a particular month, how should I calculate the bonus for that month? Also, if an employee's earned salary exceeds Rs. 2500.00, which is calculated at a rate of 20% of the salary, assuming the salary is Rs. 2500.00 per month. (2500*20% = 500) OR (1917*20% = 383)

Thank you,
A. Afroj

Dear,

Please do not be too technical in calculation. Bonus is paid annually. If the salary is Rs 2500/- per month, then Rs 2500/- X 12 = 30000 X 8.33% minimum bonus or X 20% maximum bonus. Don't be bothered about days stuff.

With Regards,

V. Sounder Rajan