Hi, I frequently visit this forum. I am looking for a format for a bonus policy. I work as an HR in an IT firm and have to format a bonus policy. Can anyone help by sending a policy so that I can have an idea?
From India, Delhi
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From India, Delhi
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Most companies pay at the minimum stipulated rate of $8.33. However, much depends on incentives, scope for overtime, etc. in your company. For instance, at one of my client sites, electricians, tailors, etc., are content with the overtime pay on a monthly basis. A better approach would be to review the policies of industry leaders in your line of business.
Surya
From India, Delhi
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45Surya
From India, Delhi
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Dear Friend,
Short title, extent and application - (1) This Act may be called the Payment of Bonus Act, 1965.
(2) It extends to the whole of India [Note: The words "except the State of Jammu and Kashmir" omitted by Act 51 of 1970, Sec.2 and Schedule (w.e.f. 1st September, 1971).
(3) Save as otherwise provided in this Act, it shall apply to -
(a) Every factory; and
(b) Every other establishment in which twenty or more persons are employed on any day during an accounting year:
[Note: Ins. by Act 23 of 1976, Sec.3 (w.e.f. 25th September, 1975) Provided that the appropriate Government may, after giving not less than two months' notice of its intention so to do, by notification in the official Gazette, apply the provisions of this Act with effect from such accounting year as may be specified in the notification, to any establishment or class establishments [including an establishment being a factory within the meaning of sub-clause (ii) of Cl. (m) of Sec.2 of the Factories Act, 1948 (63 of 1948)] employing such number of persons less than twenty as may be specified in the notification; so, however, that the number of persons so specified shall in no case be less than ten.
(4) Save as otherwise provided in this Act, the provisions of this Act shall in relation to a factory or other establishment to which this Act applies, have effect in respect of the accounting year commencing on any day in the year 1964 and in respect of every subsequent accounting year:
[Note: Added by Act 51 of 1970, Sec.2 and Schedule (w.e.f. 1st September, 1971) Provided that in relation to the State of Jammu and Kashmir, the reference to the accounting year commencing on any day in the year 1964 and every subsequent accounting year shall be construed as reference to the accounting year commencing on any day in the year 1968 and every subsequent accounting year:]
[Note: Ins. by Act 23 of 1976, Sec.3 (w.e.f. 25th September, 1975) Provided further that when the provisions of this Act have been made applicable to any establishment or class of establishments by the issue of a notification under the proviso to subsection (3), the reference to the accounting year commencing on any day in the year 1964 and every subsequent accounting year or, as the case may be, the reference to the accounting year commencing on any day in the year 1968 and every subsequent accounting year shall in relation to such establishment or class of establishments, be construed as a reference to the accounting year specified in such notification and every subsequent accounting year.]
(5) An establishment to which this Act applies [Note: The words, brackets, letter, and figure "under Cl. (b) of subsection (3)" omitted by Act 23 of 1976, Sec.8 (w.e.f. 25th September, 1975)] shall continue to be governed by this Act notwithstanding that the number of persons employed therein falls below twenty [(Note: Ins. by Act 23 of 1976, Sec-3, (w.e.f. 25th September, 1975) or, as the case may be, the number specified in the notification issued under the proviso to subsection (3)].
NOTES
Section 1 and 2 of the Payment of Bonus (Amendment) Act No.43 of 1977 provide as follows:
Short title and commencement - (1) This Act may be called the Payment of Bonus (Amendment) Act, 1977.
(2) It shall come into force on the third day of September, 1977.
The Payment of Bonus Act, 1965 (hereinafter referred to as the principal Act) shall -
(a) In relation to a factory or other establishment to which the principal Act applies immediately before the commencement of this Act and
(b) In relation to a banking company and the Industrial Reconstruction Corporation of India to which the principal Act applies on and from such commencement by virtue of this Act,
Have effect in respect of the accounting year commencing on any day in the year 1976 [and in respect of the accounting year commencing on any day in the year 1977], as if the amendments specified in Sections 3 to 19 have been made in that Act.
Explanation - In this section, the expressions "banking company" and "accounting year" shall have the meanings respectively assigned to them in clauses (8) and (1) of Section 2 of the principal Act.
Definitions - In this Act, unless the context otherwise requires -
(1) "Accounting year" means -
(i) In relation to a corporation, the year ending on the day on which the books and accounts of the corporation are to be closed and balanced:
(ii) In relation to a company, the period in respect of which any profit and loss account of the company laid before it in the annual general meeting is made up, whether that period is a year or not;
(iii) In any other case -
(a) The year commencing on the 1st day of April; or
(b) If the accounts of an establishment maintained by the employer thereof are closed and balanced on any day other than the 31st day of March, then, at the option of the employer, the year ending on the day on which its accounts are so closed and balanced:
Provided that an option once exercised by the employer under para. (b) of this sub-clause shall not again be exercised except with the previous permission in writing of the prescribed authority and upon such conditions as that authority may think fit:
(2) "Agricultural income" shall have the same meaning as in the Income-tax Act;
(3) "Agricultural income-tax law" means any law for the time being in force relating to the levy of tax on agricultural income;
(4) "Allocable surplus" means -
(a) In relation to an employer, being a company [(Note: Ins. by Act 66 of 1980 (w.e.f. 21st August,1980) (other than a banking company)] which has not made the arrangements prescribed under the Income-tax Act for the declaration and payment within Indian of the dividends payable out of its profits in accordance with the provisions of Sec.194 of that Act, sixty-seven per cent of the available surplus in an accounting year;
(b) In any other case, sixty per cent of such available surplus; (Note: Certain words omitted by Act 23 of 1976, Sec.4 (w.e.f. 25th September, 1975)
(6) "Available surplus" means the available surplus computed under Sec.5;
(7) "Award" means an interim or a final determination of any industrial dispute or of any question relating thereto by any Labour Court, Industrial Tribunal, or National Tribunal constituted under the Industrial Disputes Act, 1947 (14 of 1947), or by any other authority constituted under any corresponding law relating to the investigation and settlement of industrial disputes in force in a State and includes an arbitration award made under Sec. 10-A of that Act or under that law;
(8) "Banking company" means a banking company as defined in Sec.5 of the Banking Companies Act, 1949 (10 of 1949), and includes the State Bank of India, any subsidiary bank as defined in the State Bank of India (Subsidiary Bank) Act, 1959 (38 of 1959), [(Note: Ins. by Act 23 of 1976 Sec.4 (w.e.f. 25th September, 1975) any corresponding new bank specified in the First Schedule to the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, (5 of 1970), [Note: Ins. by Act 66 of 1980, (w.e.f. 21st August, 1980) any corresponding new bank constituted under Sec.3 of Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980] any co-operative bank as defined in Cl. (bii) of Sec.2 of the Reserve Bank of India Act, 1934 (2 of 1934),] and any other banking institution which may be notified in this behalf by the Central Government.
(9) "Company" means any company as defined in Sec.3 of the Companies Act, 1956 (1 of 1956), and includes a foreign company within the meaning of Sec.591 of that Act;
(10) "Co-operative society" means a society registered or deemed to be registered under the Co-operative Societies Act, 1912 (2 of 1912), or any other law for the time being in force in any State relating to co-operative societies;
(11) "Corporation" means any body corporate established by or under any Central, Provincial or State Act but does not include a company or a co-operative society:
(12) "Direct tax" means -
(a) Any tax chargeable under -
(i) The Income-tax Act;
(ii) The Super Profits Tax Act, 1963 (14 of 1963);
(iii) The Companies (Profits) Surtax Act, 1964 (7 of 1964);
(iv) The agricultural income-tax law; and
(b) Any other tax which, having regard to its nature or incidence, may be declared by the Central Government, by notification in the official Gazette to be a direct tax for the purposes of this Act;
(13) "Employee" means any person (other than an apprentice) employed on
From India, Madras
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Short title, extent and application - (1) This Act may be called the Payment of Bonus Act, 1965.
(2) It extends to the whole of India [Note: The words "except the State of Jammu and Kashmir" omitted by Act 51 of 1970, Sec.2 and Schedule (w.e.f. 1st September, 1971).
(3) Save as otherwise provided in this Act, it shall apply to -
(a) Every factory; and
(b) Every other establishment in which twenty or more persons are employed on any day during an accounting year:
[Note: Ins. by Act 23 of 1976, Sec.3 (w.e.f. 25th September, 1975) Provided that the appropriate Government may, after giving not less than two months' notice of its intention so to do, by notification in the official Gazette, apply the provisions of this Act with effect from such accounting year as may be specified in the notification, to any establishment or class establishments [including an establishment being a factory within the meaning of sub-clause (ii) of Cl. (m) of Sec.2 of the Factories Act, 1948 (63 of 1948)] employing such number of persons less than twenty as may be specified in the notification; so, however, that the number of persons so specified shall in no case be less than ten.
(4) Save as otherwise provided in this Act, the provisions of this Act shall in relation to a factory or other establishment to which this Act applies, have effect in respect of the accounting year commencing on any day in the year 1964 and in respect of every subsequent accounting year:
[Note: Added by Act 51 of 1970, Sec.2 and Schedule (w.e.f. 1st September, 1971) Provided that in relation to the State of Jammu and Kashmir, the reference to the accounting year commencing on any day in the year 1964 and every subsequent accounting year shall be construed as reference to the accounting year commencing on any day in the year 1968 and every subsequent accounting year:]
[Note: Ins. by Act 23 of 1976, Sec.3 (w.e.f. 25th September, 1975) Provided further that when the provisions of this Act have been made applicable to any establishment or class of establishments by the issue of a notification under the proviso to subsection (3), the reference to the accounting year commencing on any day in the year 1964 and every subsequent accounting year or, as the case may be, the reference to the accounting year commencing on any day in the year 1968 and every subsequent accounting year shall in relation to such establishment or class of establishments, be construed as a reference to the accounting year specified in such notification and every subsequent accounting year.]
(5) An establishment to which this Act applies [Note: The words, brackets, letter, and figure "under Cl. (b) of subsection (3)" omitted by Act 23 of 1976, Sec.8 (w.e.f. 25th September, 1975)] shall continue to be governed by this Act notwithstanding that the number of persons employed therein falls below twenty [(Note: Ins. by Act 23 of 1976, Sec-3, (w.e.f. 25th September, 1975) or, as the case may be, the number specified in the notification issued under the proviso to subsection (3)].
NOTES
Section 1 and 2 of the Payment of Bonus (Amendment) Act No.43 of 1977 provide as follows:
Short title and commencement - (1) This Act may be called the Payment of Bonus (Amendment) Act, 1977.
(2) It shall come into force on the third day of September, 1977.
The Payment of Bonus Act, 1965 (hereinafter referred to as the principal Act) shall -
(a) In relation to a factory or other establishment to which the principal Act applies immediately before the commencement of this Act and
(b) In relation to a banking company and the Industrial Reconstruction Corporation of India to which the principal Act applies on and from such commencement by virtue of this Act,
Have effect in respect of the accounting year commencing on any day in the year 1976 [and in respect of the accounting year commencing on any day in the year 1977], as if the amendments specified in Sections 3 to 19 have been made in that Act.
Explanation - In this section, the expressions "banking company" and "accounting year" shall have the meanings respectively assigned to them in clauses (8) and (1) of Section 2 of the principal Act.
Definitions - In this Act, unless the context otherwise requires -
(1) "Accounting year" means -
(i) In relation to a corporation, the year ending on the day on which the books and accounts of the corporation are to be closed and balanced:
(ii) In relation to a company, the period in respect of which any profit and loss account of the company laid before it in the annual general meeting is made up, whether that period is a year or not;
(iii) In any other case -
(a) The year commencing on the 1st day of April; or
(b) If the accounts of an establishment maintained by the employer thereof are closed and balanced on any day other than the 31st day of March, then, at the option of the employer, the year ending on the day on which its accounts are so closed and balanced:
Provided that an option once exercised by the employer under para. (b) of this sub-clause shall not again be exercised except with the previous permission in writing of the prescribed authority and upon such conditions as that authority may think fit:
(2) "Agricultural income" shall have the same meaning as in the Income-tax Act;
(3) "Agricultural income-tax law" means any law for the time being in force relating to the levy of tax on agricultural income;
(4) "Allocable surplus" means -
(a) In relation to an employer, being a company [(Note: Ins. by Act 66 of 1980 (w.e.f. 21st August,1980) (other than a banking company)] which has not made the arrangements prescribed under the Income-tax Act for the declaration and payment within Indian of the dividends payable out of its profits in accordance with the provisions of Sec.194 of that Act, sixty-seven per cent of the available surplus in an accounting year;
(b) In any other case, sixty per cent of such available surplus; (Note: Certain words omitted by Act 23 of 1976, Sec.4 (w.e.f. 25th September, 1975)
(6) "Available surplus" means the available surplus computed under Sec.5;
(7) "Award" means an interim or a final determination of any industrial dispute or of any question relating thereto by any Labour Court, Industrial Tribunal, or National Tribunal constituted under the Industrial Disputes Act, 1947 (14 of 1947), or by any other authority constituted under any corresponding law relating to the investigation and settlement of industrial disputes in force in a State and includes an arbitration award made under Sec. 10-A of that Act or under that law;
(8) "Banking company" means a banking company as defined in Sec.5 of the Banking Companies Act, 1949 (10 of 1949), and includes the State Bank of India, any subsidiary bank as defined in the State Bank of India (Subsidiary Bank) Act, 1959 (38 of 1959), [(Note: Ins. by Act 23 of 1976 Sec.4 (w.e.f. 25th September, 1975) any corresponding new bank specified in the First Schedule to the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, (5 of 1970), [Note: Ins. by Act 66 of 1980, (w.e.f. 21st August, 1980) any corresponding new bank constituted under Sec.3 of Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980] any co-operative bank as defined in Cl. (bii) of Sec.2 of the Reserve Bank of India Act, 1934 (2 of 1934),] and any other banking institution which may be notified in this behalf by the Central Government.
(9) "Company" means any company as defined in Sec.3 of the Companies Act, 1956 (1 of 1956), and includes a foreign company within the meaning of Sec.591 of that Act;
(10) "Co-operative society" means a society registered or deemed to be registered under the Co-operative Societies Act, 1912 (2 of 1912), or any other law for the time being in force in any State relating to co-operative societies;
(11) "Corporation" means any body corporate established by or under any Central, Provincial or State Act but does not include a company or a co-operative society:
(12) "Direct tax" means -
(a) Any tax chargeable under -
(i) The Income-tax Act;
(ii) The Super Profits Tax Act, 1963 (14 of 1963);
(iii) The Companies (Profits) Surtax Act, 1964 (7 of 1964);
(iv) The agricultural income-tax law; and
(b) Any other tax which, having regard to its nature or incidence, may be declared by the Central Government, by notification in the official Gazette to be a direct tax for the purposes of this Act;
(13) "Employee" means any person (other than an apprentice) employed on
From India, Madras
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It is still contradictory. Can somebody provide a clear picture whether the two components Basic + DA are to be considered to set the eligibility criteria? Because as per the above definition of Salary or Wages, it is given that all cash payments, by whatever name called, paid to an employee on account of a rise in the cost of living are considered. What about other allowances such as Conveyance Allowance, Special Allowance, professional allowance, etc.?
Ravi
From India, New Delhi
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Ravi
From India, New Delhi
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Published_draft _rules_on Employees_ compensation 3.6.2020.pdf