Understanding Minimum Bonus Requirements for Engineering Firms in Karnataka: What's the Legal Obligation?

Hi,

We are in the engineering industry located in Bangalore. What is the minimum bonus we have to pay? Is it 8.33% of Rs. 7000 or the minimum wages?

Is the engineering industry listed under scheduled employment in Karnataka?

Statutory Bonus Calculation

The statutory bonus is to be reckoned on the actual wages. When the wages exceed Rs. 7000.00 per month, the bonus has to be calculated as if the wages were Rs. 7000.00 per month only, or the minimum wages fixed for the employment, whichever is higher. Therefore, you have to calculate the minimum bonus of 8.33% on the actual minimum wages fixed when it is higher than the notional wages of Rs. 7000.00. When it happens to be less than Rs. 7000.00, the calculation shall be 8.33% of Rs. 7000.00 per month only. This formula is equally applicable to a bonus of any percentage more than 8.33% also.

Finding Industry-Specific Information

For your last question, try to find the answer from the website of the Karnataka Government, Labor Department.

Dear Umakanthan Sir,

Thank you for your valuable information. Could you please provide the relevant act/rule in this regard?

What about the bonus liability with regards to contract employees? Whether the principal employer is responsible for the bonus.