Dear Senior Friends,
I am in a state of confusion regarding whether the Bonus ceiling of Rs. 3500/- is mandatory. Our management is adamant about not paying bonuses above this ceiling limit. Could you please clarify?
Regards,
PBS KUMAR
From India, Kakinada
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592I am in a state of confusion regarding whether the Bonus ceiling of Rs. 3500/- is mandatory. Our management is adamant about not paying bonuses above this ceiling limit. Could you please clarify?
Regards,
PBS KUMAR
From India, Kakinada
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Hello,
Yes, the law is rigid in that only employees drawing (Basic+DA) less than Rs. 3500/- per month are covered under the act. The law also states that the bonus determined under and as stipulated in the act can be paid up to a maximum salary/wage (Basic+DA) of Rs. 2500/- only.
Any law prescribes the minimum to be complied with, but this act has also mandated the maximum that can be done under the act.
However, the employer is free to pay employees not covered under the act any amount as "ex-gratia" and not "bonus under the act." Your company is therefore within its rights to not pay anything to those outside the scope of the act. This will not create any legal problems, though it may lead to discontent amongst the employees denied bonus payment due to provisions of the law itself.
As a fair practice, many organizations pay employees not covered under the act an identical amount but as "ex-gratia" and not "bonus under the act." Some organizations cover such employees under different types of Superannuation Schemes. But this is volitional to the organizations and cannot be forced upon them!
The picture can change after the imminent amendments to the Payment of Bonus Act are actually known in the form of an amendment or as an ordinance.
Till then, we only wait and watch.
Hope the issue is resolved for you.
Regards,
Samvedan
October 20, 2007
From India, Pune
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Yes, the law is rigid in that only employees drawing (Basic+DA) less than Rs. 3500/- per month are covered under the act. The law also states that the bonus determined under and as stipulated in the act can be paid up to a maximum salary/wage (Basic+DA) of Rs. 2500/- only.
Any law prescribes the minimum to be complied with, but this act has also mandated the maximum that can be done under the act.
However, the employer is free to pay employees not covered under the act any amount as "ex-gratia" and not "bonus under the act." Your company is therefore within its rights to not pay anything to those outside the scope of the act. This will not create any legal problems, though it may lead to discontent amongst the employees denied bonus payment due to provisions of the law itself.
As a fair practice, many organizations pay employees not covered under the act an identical amount but as "ex-gratia" and not "bonus under the act." Some organizations cover such employees under different types of Superannuation Schemes. But this is volitional to the organizations and cannot be forced upon them!
The picture can change after the imminent amendments to the Payment of Bonus Act are actually known in the form of an amendment or as an ordinance.
Till then, we only wait and watch.
Hope the issue is resolved for you.
Regards,
Samvedan
October 20, 2007
From India, Pune
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Hi all, We have talked to Lab. Officers or other senior persons in Labour Deptt. but no one is ready to say amount effectiveness of amendment dates. Regards L.C.Pal
From India, Delhi
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From India, Delhi
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I am drawing a basic salary of Rs. 6000/- per month. Management will pay a bonus of Rs. 3500/- or Rs. 6000/- to me. Please provide clarification on which bonus I will receive. I have been present for all the working days.
From India, Gulbarga
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From India, Gulbarga
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