How Should Bonuses Be Handled for Lockdown Wages from April to May 2020?

Dear Members,

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

Essentially, employees received their wages/salaries without putting in a day's work (of course, no fault of theirs). The establishment also remitted PF & ESI on these lockdown wages.

Establishment's Perspective on Bonus Payment

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

I would appreciate some clarification.

In my opinion, if the organization has paid salaries/wages and deposited PF, ESIC, etc., the employees will be eligible for a bonus. The employees may not have been physically present for those days, but in the salary/wage register, it would 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 lockdown 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 a bonus. Such an act by the employer would be like gifting away the elephant but holding back the angus.