As per Section 11 of Payment of Bonus of Act, 1965:
'Where in respect of any accounting year, the allocable surplus exceeds the amount of minimum bonus payable to the employees, the employer shall, in lieu of such minimum bonus, be bound to pay to every employee in respect of that accounting; year bonus which shall be an amount in proportion to the salary or wage earned by the employee during the accounting year subject to a maximum of twenty percent, of such salary or wage.'
My questions are as below:
1) if Allocable surplus is more than 8.33% bonus liability but less than 20% can the employer decide his own percentage eg: 10%, 16% etc. Another way to put this question is whether the employer has the discretion to choose the percentage of bonus if allocable surplus is more than minimum bonus (8.33%) liability.
2) if Allocable surplus is more than 20% bonus liability, is it compulsory to pay a maximum bonus of 20% or still the employer has the discretion to choose the percentage of bonus.
3) I somewhere read that the provision of Section 11 of the Payment of Bonus Act, however, does not create any bar for the employer to declare such higher percentage or quantum of bonus over and above the minimum bonus (8.33%) payable to the employees under Section 10 of the said Act irrespective of the amount of available allocable surplus with him.
Can we call this interpretation correct?
'Where in respect of any accounting year, the allocable surplus exceeds the amount of minimum bonus payable to the employees, the employer shall, in lieu of such minimum bonus, be bound to pay to every employee in respect of that accounting; year bonus which shall be an amount in proportion to the salary or wage earned by the employee during the accounting year subject to a maximum of twenty percent, of such salary or wage.'
My questions are as below:
1) if Allocable surplus is more than 8.33% bonus liability but less than 20% can the employer decide his own percentage eg: 10%, 16% etc. Another way to put this question is whether the employer has the discretion to choose the percentage of bonus if allocable surplus is more than minimum bonus (8.33%) liability.
2) if Allocable surplus is more than 20% bonus liability, is it compulsory to pay a maximum bonus of 20% or still the employer has the discretion to choose the percentage of bonus.
3) I somewhere read that the provision of Section 11 of the Payment of Bonus Act, however, does not create any bar for the employer to declare such higher percentage or quantum of bonus over and above the minimum bonus (8.33%) payable to the employees under Section 10 of the said Act irrespective of the amount of available allocable surplus with him.
Can we call this interpretation correct?