Addressing Non-Payment of Statutory Bonuses
Please suggest what we can do as HR if a company with more than 20 employees is not paying a statutory bonus even when it is profitable. How can we help the management understand the importance of paying bonuses? What are the repercussions of not paying bonuses?
Thank you.
From India, New Delhi
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Please suggest what we can do as HR if a company with more than 20 employees is not paying a statutory bonus even when it is profitable. How can we help the management understand the importance of paying bonuses? What are the repercussions of not paying bonuses?
Thank you.
From India, New Delhi
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The Payment of Bonus Act
The Payment of Bonus Act applies to establishments employing more than 20 workmen, and the covered workmen are those drawing wages not exceeding Rs. 10,000/- per month. The breach of the provision could lead to penal consequences: violation of the liability to pay statutory bonus would entail the penalty of imprisonment for six months or a fine of Rs. 1000, or both. In case of failure to comply with the directions or requisitions made, the penalty is imprisonment for six months or a fine of Rs. 1000, or both.
Offences by Companies
As regards offences by companies, firms, bodies corporate, or associations of individuals, its director, partner, or a principal or officer responsible for the conduct of its business should be deemed guilty of that offence, unless the person concerned proves that the crime was committed without his knowledge or that he exercised all due diligence. Thus, it has both civil and penal consequences.
From India, Mumbai
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1593The Payment of Bonus Act applies to establishments employing more than 20 workmen, and the covered workmen are those drawing wages not exceeding Rs. 10,000/- per month. The breach of the provision could lead to penal consequences: violation of the liability to pay statutory bonus would entail the penalty of imprisonment for six months or a fine of Rs. 1000, or both. In case of failure to comply with the directions or requisitions made, the penalty is imprisonment for six months or a fine of Rs. 1000, or both.
Offences by Companies
As regards offences by companies, firms, bodies corporate, or associations of individuals, its director, partner, or a principal or officer responsible for the conduct of its business should be deemed guilty of that offence, unless the person concerned proves that the crime was committed without his knowledge or that he exercised all due diligence. Thus, it has both civil and penal consequences.
From India, Mumbai
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If the establishment is a factory only 10 employed persons is enough for applicability of Bonus Act. Eligibility threshold for bonus is Rs 21000/ pm not 10000. Varghese Mathew 9961266966
From India, Thiruvananthapuram
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From India, Thiruvananthapuram
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Agree with Varghase's above comment. In addition to this, if the company is not making a profit, a minimum bonus of 8.33% should be given as per the Set on/Set off process of allocable surplus mentioned in the Bonus Act. Depending on profitability, it may increase to 20% of the bonus. Either MW should be considered as the minimum salary ceiling or not less than Rs. 7000/-.
If the company does not agree to pay the bonus, statutory authorities can get involved to enforce it.
From India, Pune
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If the company does not agree to pay the bonus, statutory authorities can get involved to enforce it.
From India, Pune
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Amendment to Payment of Bonus Act 2015.jpg
Bigger bonuses for more as Lok Sabha amends Payment of Bonus Act - The Economic Times.pdf
THE PAYMENT OF BONUS ACT.doc