Bonus under Payment of Bonus Act for lockdown period 01 Apr 20 to 17 May 20

Dear Members,

This query pertains specifically to BONUS under Payment of Bonus Act for the Wages / Salaries paid by establishments to employees during the period when MHA order regarding compulsory payment of wages / salaries without any deduction was applicable (01 Apr 20 to 17 May 20).

Essentially employees got their wages / salaries without putting in a days work (of course, no fault of theirs'). Estb also remitted PF & ESI on these lockdown wages.

From the establishment point of view, how are these days (01 Apr 20 to 17 May 20) to be treated with regard to payment of bonus? Will the employee be eligible for Bonus for these days?

Would appreciate some clarification.

To my opinion if the organization has paid salary/wages, deposited PF, ESIC etc., the employees will be eligible for bonus. The employees may not be physically present for those days, but in salary/wage register it would be reflect that they were paid.


S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions

I agree with the view of Mr. Bandyopadhyay. Bonus is an overall performance related statutory payment. In this process, the performance of the establishment as a whole in an accounting year is the basis for the determination of the bonus payable under the Payment of Bonus Act,1965 and the total salary earned by the eligible employee in the AY forms the criterion for the computation of the bonus due to him. Right or wrong, payment under the head of 'salary' for the lock down period was already paid to the employees as a measure of humanitarian consideration. It cannot be simply taken out of the total salary received by them on the ground of no work done by them during that particular spell just for the purpose of bonus. Such an act by the employer would be like gifting away the elephant but holding back the angus.

Lockdown has been a challenging period of time for each one of us around the globe. The economy has reached an unprecedented threshold. Many organizations have implemented policies to tackle such situations. Many organizations slashed salaries to half the amount in order to tackle economic constraints of the organization.

Bonuses of many organizations have been postponed. Even the government has implemented laws to help the employee sector. State governments have remitted PF and ESI on lockdown wages. With new laws developed by the government, new policies will decide on bonuses of the employees.


Amit Kumar
HROne

Thank you everyone for your valuable advice and my apologies for the rather late response from my side.
Regards

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