Hi guys! i would like to know if a company is legible to pay bonus if it is a new company (6 months in operation). what are the rules for the same? thanks
From India, Mumbai
Acknowledge(0)
Amend(0)
From India, Mumbai
Acknowledge(0)Amend(0)
Hi,
No new company will be liable to pay any bonus for up to 5 years due to its infancy period. However, if it is a branch or sister concern of another unit that has been operational for more than 5 years, then the company is liable to pay bonuses according to the act. Nonetheless, if the new unit maintains its own separate balance sheet, it is not liable to pay any bonuses.
From India, Lucknow
Acknowledge(1)Amend(0)
3No new company will be liable to pay any bonus for up to 5 years due to its infancy period. However, if it is a branch or sister concern of another unit that has been operational for more than 5 years, then the company is liable to pay bonuses according to the act. Nonetheless, if the new unit maintains its own separate balance sheet, it is not liable to pay any bonuses.
From India, Lucknow
Acknowledge(1)Amend(0)
Good answer.
Though you are not liable, it is considered good practice to issue an ex gratia amount as a festival bonus to keep up morale, build a good atmosphere, and create positive expectations from the employees. Once you begin ex gratia payments, you may not be able to withdraw them, so ensure that the amount is practical in terms of expenses and useful in meeting expectations.
Best regards,
Joseph
From India, Kochi
Acknowledge(0)Amend(0)
Though you are not liable, it is considered good practice to issue an ex gratia amount as a festival bonus to keep up morale, build a good atmosphere, and create positive expectations from the employees. Once you begin ex gratia payments, you may not be able to withdraw them, so ensure that the amount is practical in terms of expenses and useful in meeting expectations.
Best regards,
Joseph
From India, Kochi
Acknowledge(0)Amend(0)CiteHR is an AI-augmented HR knowledge and collaboration platform, enabling HR professionals to solve real-world challenges, validate decisions, and stay ahead through collective intelligence and machine-enhanced guidance. Join Our Platform.
Amendment to Payment of Bonus Act 2015.jpg
Bonus act amendment gazette copy.pdf