Dear All,
I need clarification on bonus payment for resigned employees. We normally declare bonuses during Diwali for the previous financial year. Now, if an employee resigns in between, is it mandatory to pay the bonus along with the full and final settlement, or can we hold it until we declare the bonus?
Any valuable updates or notifications would be highly appreciated.
Thanks,
Pradeepan
From India, Raipur
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12I need clarification on bonus payment for resigned employees. We normally declare bonuses during Diwali for the previous financial year. Now, if an employee resigns in between, is it mandatory to pay the bonus along with the full and final settlement, or can we hold it until we declare the bonus?
Any valuable updates or notifications would be highly appreciated.
Thanks,
Pradeepan
From India, Raipur
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The Payment of Bonus Act is very clear. You are required to pay bonus to all employees within 8 months from the end of the financial year.
There aren't any specific provisions for separated employees. So the same rule applies to them as well.
Therefore, you are free to give it along with all the others within 8 months. Most companies give it along with full and final settlement because otherwise, they have to find the employee and give him the money later. If you do not give it to him, then it must be noted in the unpaid bonus register and after 3 years deposited in the labor welfare fund.
Another thing to note is that you are talking of Diwali bonus, not statutory bonus. If you are paying a customary bonus (like at Diwali or Dasara), then you can adjust that at the time of the annual bonus. It means in effect you paid a bonus during the year and not at the end of the year, and therefore you don't need to pay anything more now (there are circumstances you need to verify). However, it's actually unfair because you probably didn't pay those who are newly joined.
From India, Mumbai
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There aren't any specific provisions for separated employees. So the same rule applies to them as well.
Therefore, you are free to give it along with all the others within 8 months. Most companies give it along with full and final settlement because otherwise, they have to find the employee and give him the money later. If you do not give it to him, then it must be noted in the unpaid bonus register and after 3 years deposited in the labor welfare fund.
Another thing to note is that you are talking of Diwali bonus, not statutory bonus. If you are paying a customary bonus (like at Diwali or Dasara), then you can adjust that at the time of the annual bonus. It means in effect you paid a bonus during the year and not at the end of the year, and therefore you don't need to pay anything more now (there are circumstances you need to verify). However, it's actually unfair because you probably didn't pay those who are newly joined.
From India, Mumbai
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Hello,
Sharpening the focus of Mr. Saswata Banerjee, permit me to only add by way of clarification the following:
1) There is no need to pay the bonus to the separated employee along with the F & F settlement.
2) Bonus is always paid for the previous financial year.
3) You need to pay the bonus within eight months from the close of the financial year to covered employees and those who have put in more than 30 days of service during the concerned year.
4) If the bonus is paid to employees not covered under the Payment of Bonus Act 1965 as a term of employment, then you must make the payment along with the F & F settlement only.
Regards,
Samvedan
June 30, 2015
From India, Pune
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Sharpening the focus of Mr. Saswata Banerjee, permit me to only add by way of clarification the following:
1) There is no need to pay the bonus to the separated employee along with the F & F settlement.
2) Bonus is always paid for the previous financial year.
3) You need to pay the bonus within eight months from the close of the financial year to covered employees and those who have put in more than 30 days of service during the concerned year.
4) If the bonus is paid to employees not covered under the Payment of Bonus Act 1965 as a term of employment, then you must make the payment along with the F & F settlement only.
Regards,
Samvedan
June 30, 2015
From India, Pune
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Dear All bonus must be paid within one day after is FNF otherwise within 8 month after compilation of period after resigned it is necessary to pay bonus within one day after his FNF
From India, Faridabad
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From India, Faridabad
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If the person is covered under the Bonus Act, you need not pay along with F&F. However, paying it then is the easiest way. If you don't, you need to find him and pay later, which is more complicated.
If he is not under the Bonus Act but eligible for a bonus (under settlement or the terms of the appointment letter), then it should be paid along with full and final. There is no justification for paying it later. One problem is some companies don't know at the time of resignation how much bonus will finally be declared. In that case, you have no option but to wait until the accounts are finalized, and the bonus amount is computed.
From India, Mumbai
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If he is not under the Bonus Act but eligible for a bonus (under settlement or the terms of the appointment letter), then it should be paid along with full and final. There is no justification for paying it later. One problem is some companies don't know at the time of resignation how much bonus will finally be declared. In that case, you have no option but to wait until the accounts are finalized, and the bonus amount is computed.
From India, Mumbai
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Bonus is for whatever period the worker worked. At the F and F bonus is worked out 81/3% of the gross wage (Min wage) or statutory amount of Rs. 3500/- per year and proportional amount for the months.
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The bonus is calculated based on the period the worker has worked. At the firm, the bonus is determined as 8⅓% of the gross wage (minimum wage) or a statutory amount of Rs. 3,500 per year, with a proportional amount for the months worked.
From India, Nellore
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The bonus is calculated based on the period the worker has worked. At the firm, the bonus is determined as 8⅓% of the gross wage (minimum wage) or a statutory amount of Rs. 3,500 per year, with a proportional amount for the months worked.
From India, Nellore
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So what happens if the final bonus is at 20% instead of 8.33% ?
From India, Mumbai
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From India, Mumbai
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