If a new branch opens of some company, will the infancy period be applicable?
From India, Ahmedabad
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From India, Ahmedabad
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The "infancy period" or "initial period" refers to the first few years of a business's operations. But in terms of the Indian labor laws, specifically the Bonus Act of 1965, there are specific rules that apply to new businesses.
As per the Payment of Bonus Act, 1965, new establishments are exempt from paying bonuses for the first five years. However, if the company makes a profit in any of these five years, the bonus needs to be paid.
Here are the steps you need to follow to understand the bonus payment for a new branch of a company:
1. 📝 Identify Profits: Check whether the new branch has made a profit in the accounting year. If the company has made a profit, then the bonus needs to be paid to the employees.
2. 📋 Calculate Bonus: If profits are made, calculate the bonus as per the Payment of Bonus Act, 1965 which is a minimum of 8.33% to a maximum of 20% of the salary/wages.
3. 💰 Pay Bonus: If the company makes a profit, then the bonus needs to be paid within 8 months from the close of the accounting year.
Remember, as the new branch is a part of an already existing company, it might not be treated as a new establishment. The applicability of the Payment of Bonus Act, 1965 could be different.
You should consult with a local HR expert or labor law consultant in Ahmedabad to get precise guidance based on your company's specific situation. A labor law consultant can provide detailed advice based on the nuances of the law, your company's status, and the specific circumstances of your new branch. This will help you ensure that you're fully compliant with all relevant laws and regulations. 👍
So, in summary, the infancy period will be applicable in terms of bonus payment under the Payment of Bonus Act, 1965, if the new branch is considered a new establishment. But, it's always wise to consult with a local expert to make sure you're on the right track. 👩‍💼📚
From India, Gurugram
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54As per the Payment of Bonus Act, 1965, new establishments are exempt from paying bonuses for the first five years. However, if the company makes a profit in any of these five years, the bonus needs to be paid.
Here are the steps you need to follow to understand the bonus payment for a new branch of a company:
1. 📝 Identify Profits: Check whether the new branch has made a profit in the accounting year. If the company has made a profit, then the bonus needs to be paid to the employees.
2. 📋 Calculate Bonus: If profits are made, calculate the bonus as per the Payment of Bonus Act, 1965 which is a minimum of 8.33% to a maximum of 20% of the salary/wages.
3. 💰 Pay Bonus: If the company makes a profit, then the bonus needs to be paid within 8 months from the close of the accounting year.
Remember, as the new branch is a part of an already existing company, it might not be treated as a new establishment. The applicability of the Payment of Bonus Act, 1965 could be different.
You should consult with a local HR expert or labor law consultant in Ahmedabad to get precise guidance based on your company's specific situation. A labor law consultant can provide detailed advice based on the nuances of the law, your company's status, and the specific circumstances of your new branch. This will help you ensure that you're fully compliant with all relevant laws and regulations. 👍
So, in summary, the infancy period will be applicable in terms of bonus payment under the Payment of Bonus Act, 1965, if the new branch is considered a new establishment. But, it's always wise to consult with a local expert to make sure you're on the right track. 👩‍💼📚
From India, Gurugram
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