Dear all,
I have a very typical situation in our organization. We have two categories of employees – one on payroll and the other category on vouchers. These voucher employees are off the payroll staff, hired by our company.
Now, I want to know whether this voucher category is eligible for a bonus or not. What does the law say about this?
Seniors, please help!
Regards,
Ranjana
From India, Mumbai
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1I have a very typical situation in our organization. We have two categories of employees – one on payroll and the other category on vouchers. These voucher employees are off the payroll staff, hired by our company.
Now, I want to know whether this voucher category is eligible for a bonus or not. What does the law say about this?
Seniors, please help!
Regards,
Ranjana
From India, Mumbai
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Hi,
I don't know what the contract terms are for your voucher staff. However, if the contract states the mention of a bonus, then you have to comply. I have not come across any mandatory/statutory clause regarding the payment of a bonus to contract staff. Other views are welcome.
Regards,
Partha.
From India, Calcutta
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I don't know what the contract terms are for your voucher staff. However, if the contract states the mention of a bonus, then you have to comply. I have not come across any mandatory/statutory clause regarding the payment of a bonus to contract staff. Other views are welcome.
Regards,
Partha.
From India, Calcutta
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Hi,
You are not directly responsible for their bonus. These voucher payment employees must have a contract with any agency. Therefore, in this regard, we become the third party, and the contracting agency becomes the first party (parent company) responsible for paying the bonus.
Please correct me if I am wrong.
Regards,
Sitaram
From India, Agartala
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You are not directly responsible for their bonus. These voucher payment employees must have a contract with any agency. Therefore, in this regard, we become the third party, and the contracting agency becomes the first party (parent company) responsible for paying the bonus.
Please correct me if I am wrong.
Regards,
Sitaram
From India, Agartala
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Dear All,
Thank you for your valuable suggestions. Our voucher staff is recruited directly by the company and not through any agency. Secondly, they are not being provided with any offer or appointment letter. Therefore, there is no contract letter or rules for them.
Now, the question arises: are they eligible for a bonus or not? I am very confused about whether to give them a bonus or not. Can anybody guide me, please?
Regards,
Ranjana
From India, Mumbai
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Thank you for your valuable suggestions. Our voucher staff is recruited directly by the company and not through any agency. Secondly, they are not being provided with any offer or appointment letter. Therefore, there is no contract letter or rules for them.
Now, the question arises: are they eligible for a bonus or not? I am very confused about whether to give them a bonus or not. Can anybody guide me, please?
Regards,
Ranjana
From India, Mumbai
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But the parent company is the principal employer and as per almost all the acts principal employer is responsible for all anomalies whether it is committed by himself or through other agency
From India, Calcutta
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From India, Calcutta
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Dear Ranjana,
I have three points to make -
1. First of all, keeping employees on 'vouchers' is not a good HR practice. If possible, try to understand why this is so and if it is possible to take them on company payroll. As the principal employer, your company is obligated to provide them statutory benefits either directly or indirectly. Keeping them on 'vouchers' is exposing the company to legal action on account of non-compliance.
2. If your company has a 'headcount' limitation, at least take these employees as outsourced employees through a temp agency so that they can at least have the statutory benefits. Do ensure that the temp agency is providing them statutory benefits.
3. Broadly speaking from a legal perspective, no employer is obligated to pay a bonus to any employee, hired directly or indirectly, if they are drawing a basic pay of more than Rs. 6500/- per month.
4. From a goodwill perspective, if budgets allow, paying a bonus to 'temp' staff enhances motivation levels and increases your rating as a 'preferred employer'. So if possible, recommend a bonus payout even if at a lower rate compared to what regular employees get.
Thank you.
From United States, Iowa City
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I have three points to make -
1. First of all, keeping employees on 'vouchers' is not a good HR practice. If possible, try to understand why this is so and if it is possible to take them on company payroll. As the principal employer, your company is obligated to provide them statutory benefits either directly or indirectly. Keeping them on 'vouchers' is exposing the company to legal action on account of non-compliance.
2. If your company has a 'headcount' limitation, at least take these employees as outsourced employees through a temp agency so that they can at least have the statutory benefits. Do ensure that the temp agency is providing them statutory benefits.
3. Broadly speaking from a legal perspective, no employer is obligated to pay a bonus to any employee, hired directly or indirectly, if they are drawing a basic pay of more than Rs. 6500/- per month.
4. From a goodwill perspective, if budgets allow, paying a bonus to 'temp' staff enhances motivation levels and increases your rating as a 'preferred employer'. So if possible, recommend a bonus payout even if at a lower rate compared to what regular employees get.
Thank you.
From United States, Iowa City
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Dear Ranjana,
I will continue ahead from Mehernaz...
As per the Bonus Act, any employee who has worked for more than 30 days is eligible for a bonus. Now, the Bonus Act is also applicable to contract employees. As rightly advised by others, try as early as possible to convince your management to hire a contractor and route all these personnel through him who are paid on a voucher. In this particular case, pay them a minimum bonus, i.e., 3500/- on a voucher, and inform them that this is their bonus. If possible, after the Diwali festival, give them a break and bring in new personnel if the old ones have completed 6-7 months. Don't wait for 240 days for them to complete.
Regards,
Ashish.
Mehernaaz Zahir said:
Dear Ranjana,
I have three points to make:
1. First of all, keeping employees on 'vouchers' is not a good HR practice. If possible, try to understand why this is so and if it is possible to take them on the company's payroll. As the principal employer, your company is obligated to provide them with statutory benefits either directly or indirectly. Keeping them on 'vouchers' exposes the company to legal action due to non-compliance.
2. If your company has a 'headcount' limitation, at least take these employees as outsourced employees through a temp agency so that they can at least have the statutory benefits. Ensure that the temp agency is providing them with statutory benefits.
3. From a legal perspective, no employer is obligated to pay a bonus to any employee, hired directly or indirectly, if they are earning a basic pay of more than Rs. 6500/- per month.
4. From a goodwill perspective, if budgets allow, paying a bonus to 'temp' staff enhances motivation levels and improves your rating as a 'preferred employer'. So, if possible, recommend a bonus payout even if at a lower rate compared to what regular employees receive.
Regards,
Mehernaaz Zahir
From India, Mumbai
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I will continue ahead from Mehernaz...
As per the Bonus Act, any employee who has worked for more than 30 days is eligible for a bonus. Now, the Bonus Act is also applicable to contract employees. As rightly advised by others, try as early as possible to convince your management to hire a contractor and route all these personnel through him who are paid on a voucher. In this particular case, pay them a minimum bonus, i.e., 3500/- on a voucher, and inform them that this is their bonus. If possible, after the Diwali festival, give them a break and bring in new personnel if the old ones have completed 6-7 months. Don't wait for 240 days for them to complete.
Regards,
Ashish.
Mehernaaz Zahir said:
Dear Ranjana,
I have three points to make:
1. First of all, keeping employees on 'vouchers' is not a good HR practice. If possible, try to understand why this is so and if it is possible to take them on the company's payroll. As the principal employer, your company is obligated to provide them with statutory benefits either directly or indirectly. Keeping them on 'vouchers' exposes the company to legal action due to non-compliance.
2. If your company has a 'headcount' limitation, at least take these employees as outsourced employees through a temp agency so that they can at least have the statutory benefits. Ensure that the temp agency is providing them with statutory benefits.
3. From a legal perspective, no employer is obligated to pay a bonus to any employee, hired directly or indirectly, if they are earning a basic pay of more than Rs. 6500/- per month.
4. From a goodwill perspective, if budgets allow, paying a bonus to 'temp' staff enhances motivation levels and improves your rating as a 'preferred employer'. So, if possible, recommend a bonus payout even if at a lower rate compared to what regular employees receive.
Regards,
Mehernaaz Zahir
From India, Mumbai
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Hi Ranjna
It seems that the topic is ended over but I also want to give my view in this issue.
I am working in an garment manufacturing export hosue and when order comes in a huge quantity manager think that they can't complete the orders with the present manpower so they employed the TEMPORARY WORKERS but only for a limited period like for 5 days for maximum for one week. These workers are not on the rolls of the company as you said the appointment letter is also not provided for them, these workers are being paid in cash and there is no personnel or any other type of records maintained by the company for them. These types of workers are not entitled for the bonus legally. If your company permits you can give them bonus.
Ranjana if you think that you need these workers for long time so take them on rolls because Voucher or Temp workers is not a good practice. I think you also don't have their records like personnel file right? If your don't have then you should have the records of each and every employee working in your organization like his personnel record or legal record like Payroll etc.
Thanks
Sushma
From China, Beijing
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It seems that the topic is ended over but I also want to give my view in this issue.
I am working in an garment manufacturing export hosue and when order comes in a huge quantity manager think that they can't complete the orders with the present manpower so they employed the TEMPORARY WORKERS but only for a limited period like for 5 days for maximum for one week. These workers are not on the rolls of the company as you said the appointment letter is also not provided for them, these workers are being paid in cash and there is no personnel or any other type of records maintained by the company for them. These types of workers are not entitled for the bonus legally. If your company permits you can give them bonus.
Ranjana if you think that you need these workers for long time so take them on rolls because Voucher or Temp workers is not a good practice. I think you also don't have their records like personnel file right? If your don't have then you should have the records of each and every employee working in your organization like his personnel record or legal record like Payroll etc.
Thanks
Sushma
From China, Beijing
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Hi Ranjana,
Thank you for your message. I noticed a few areas that could be improved for clarity and professionalism:
We usually do not keep any record of their association with the company except the personal file, which is again not very systematic. I have recently joined and came across such practices. Additionally, we have employees who have worked for years but are still not on the payroll, and nobody has ever thought about it as well. I will ensure that we switch to legal practices now.
Thank you all for your guidance.
Regards, Ranjana
From India, Mumbai
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Thank you for your message. I noticed a few areas that could be improved for clarity and professionalism:
We usually do not keep any record of their association with the company except the personal file, which is again not very systematic. I have recently joined and came across such practices. Additionally, we have employees who have worked for years but are still not on the payroll, and nobody has ever thought about it as well. I will ensure that we switch to legal practices now.
Thank you all for your guidance.
Regards, Ranjana
From India, Mumbai
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You may note that in the event of any of these voucher payment employees filing a case for regularization in your company, it will be difficult for you to defend. Please note that you are not keeping any records, but they may keep some or other records which may be helpful for them in their legal cases.
You may also note that if your company has more than 10/20 employees and has ESIC and EPF coverage, they can provide information to these inspectors and have your company thoroughly investigated. Though these inspectors only check the balance sheet in their inspections, they can still find out. The same applies to Labor inspectors, Labor Welfare Fund, etc. How many departments can you defend?
It will be in the best interest if your company considers them as employees. If the fear of a Union exists, pay them through a registered contractor who complies with all the statutory requirements of these staff.
Thanks
Shiv
From India, Mumbai
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You may also note that if your company has more than 10/20 employees and has ESIC and EPF coverage, they can provide information to these inspectors and have your company thoroughly investigated. Though these inspectors only check the balance sheet in their inspections, they can still find out. The same applies to Labor inspectors, Labor Welfare Fund, etc. How many departments can you defend?
It will be in the best interest if your company considers them as employees. If the fear of a Union exists, pay them through a registered contractor who complies with all the statutory requirements of these staff.
Thanks
Shiv
From India, Mumbai
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Hi Shiv,
I tried to convince the management, but they are not ready to bear the increased cost. We have a lawyer too, but I really don't know why he is not advising them. Can you suggest some solid grounds through which I can put forward my thoughts to the management?
Regards,
Ranjana
From India, Mumbai
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I tried to convince the management, but they are not ready to bear the increased cost. We have a lawyer too, but I really don't know why he is not advising them. Can you suggest some solid grounds through which I can put forward my thoughts to the management?
Regards,
Ranjana
From India, Mumbai
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There are several cases where the voucher payment staff have won legal cases and were taken in as regular employees. They need to just contact some unscrupulous union leaders to achieve this.
The lawyers' job is to remove the fear from the minds of clients and are eager to have new cases for their income to grow. You may note that in many cases, the lawyers do not want the cases to come to an end for fear of losing income.
Employers should be free of legal hassles and should devote time to their main business activities rather than trying to save some amount this way. This will be like penny wise and pound foolish.
From India, Mumbai
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The lawyers' job is to remove the fear from the minds of clients and are eager to have new cases for their income to grow. You may note that in many cases, the lawyers do not want the cases to come to an end for fear of losing income.
Employers should be free of legal hassles and should devote time to their main business activities rather than trying to save some amount this way. This will be like penny wise and pound foolish.
From India, Mumbai
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Hi,
I have just gone through your case. The employees who are working on vouchers are treated as part-time employees, and the labor law clearly suggests that unless there is a contract between the employees and the organization, they can't be covered under bonuses.
From India, Mumbai
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I have just gone through your case. The employees who are working on vouchers are treated as part-time employees, and the labor law clearly suggests that unless there is a contract between the employees and the organization, they can't be covered under bonuses.
From India, Mumbai
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