Can We Delay Employee Bonuses for IR Clearance, or Must We Pay Now? Seeking Guidance

Greetings to All,

We are running a partnership firm and have several contracts across India in various sectors. Recently, one of our contracts ended on March 22, and the final IR clearance work is currently in progress. The principal employer has raised a query regarding the payment of the last six-month bonus, i.e., from October '21 to March '22. Usually, we pay bonuses from October to September each year instead of considering the financial year. We requested the principal employer to permit us to make the payment by November '22, for which we will send a request letter. However, they declined our request and instructed us to pay the bonus at the earliest.

Query on Bonus Payment Schedule

Our query is whether we can withhold the bonus of the employees for eight months and pay it by November '22 as per the bonus act, or if we are required to pay it to obtain IR clearance. Some employees have resigned, and some have been transferred to other positions.

Kindly provide guidance.

Pratap N

Payment of Bonus Act and Bonus Adjustment

The Payment of Bonus Act provides that you can adjust the bonus paid during the year in any form from the final bonus payable, whether it is an advance of bonus or customary bonus. So yes, you can pay part of the bonus now and the balance in November as a customary bonus.

Bonus Payment for Employees Who Have Left

For those who have left the job, you have to pay them for the time they worked for you, either by transferring to their account or by sending them an account payee cheque to their residence by registered post. If they do not cash the cheque, you need to keep the money aside and after three years, pay it to the labour welfare fund.

Bonus for Transferred Employees

As for those who were transferred to other jobs, I do not see the problem of giving them a bonus now for part of the year.