Dear Ubaid Raheman ji,
I have seen some companies paying monthly advance against bonus due. It is an advance and not bonus payment. Once you say bonus payment and paid it monthly, it will attract ESI certainly.
When you pay any advance, you need to have proper recording with maintaining advance register. In Register C, after calculating the amount of bonus due, you have to subtract the amount of advance paid and arrive at net bonus payable.
But, why you need to do all this things?
From India, Mumbai
2555I have seen some companies paying monthly advance against bonus due. It is an advance and not bonus payment. Once you say bonus payment and paid it monthly, it will attract ESI certainly.
When you pay any advance, you need to have proper recording with maintaining advance register. In Register C, after calculating the amount of bonus due, you have to subtract the amount of advance paid and arrive at net bonus payable.
But, why you need to do all this things?
From India, Mumbai
Dear Mr. Keshav,
About your post 1. I have already justified my answer after giving appropriate section references... and asked one small questions is there is any provision under payment of bonus act which restricted monthly payments...?
Please understand my qualification it's not about applicability, objectives, diwali and dusera... it's about provision for restrictions on monthly pay under the act.
About the pro-rata means actual paid days which is not going to change either you paid on monthly or yearly.
About your 2nd post... If you treat bonus component as allownce and club the same in wages to match Minimum wage rate than its affect ESIC. Otherwise bonus it's not part wages and ESIC shall not be deducted on bonus amt.
And yes you are correct if you paid advance bonus unnecessary employer have to maintain there records and register. But, if you paid bonus on monthly basis employer only have to maintain Register of bonus in Form C and now a days everyone using payroll software therefore in one click they will get information in Form C.
Why we introduce this for few of our contractors...
Few of our contractors they claimed there employees bonus from us and not paid to there employees. After few months when we come to know this sin till time workers representative were filed the matter in conciliation before ALC and to settled the issue for smooth operation at shop floor we have repaid the same amt. to all workers.
Latter on we recovered our money from contractors and terminate them but unnecessary our work and reputation got affected.
Second reason... In our factories few loader and unloader categories casual labour demands more take home salary that they actually paid by few employers but they were not deducted statutory part. And in our case after statutory deduction they will get less take home salary and they pepole are leased bother about statutory part as they don't want that. And to come out with this things we have decided to pay them bonus and leave salary on monthly basis.
As it's some sichwational based decisions that we have to take in some circumstances.
Please excuse me, as I am only seeking for my question answer and same i have asked to learned members with all due respect.
From India, Mumbai
About your post 1. I have already justified my answer after giving appropriate section references... and asked one small questions is there is any provision under payment of bonus act which restricted monthly payments...?
Please understand my qualification it's not about applicability, objectives, diwali and dusera... it's about provision for restrictions on monthly pay under the act.
About the pro-rata means actual paid days which is not going to change either you paid on monthly or yearly.
About your 2nd post... If you treat bonus component as allownce and club the same in wages to match Minimum wage rate than its affect ESIC. Otherwise bonus it's not part wages and ESIC shall not be deducted on bonus amt.
And yes you are correct if you paid advance bonus unnecessary employer have to maintain there records and register. But, if you paid bonus on monthly basis employer only have to maintain Register of bonus in Form C and now a days everyone using payroll software therefore in one click they will get information in Form C.
Why we introduce this for few of our contractors...
Few of our contractors they claimed there employees bonus from us and not paid to there employees. After few months when we come to know this sin till time workers representative were filed the matter in conciliation before ALC and to settled the issue for smooth operation at shop floor we have repaid the same amt. to all workers.
Latter on we recovered our money from contractors and terminate them but unnecessary our work and reputation got affected.
Second reason... In our factories few loader and unloader categories casual labour demands more take home salary that they actually paid by few employers but they were not deducted statutory part. And in our case after statutory deduction they will get less take home salary and they pepole are leased bother about statutory part as they don't want that. And to come out with this things we have decided to pay them bonus and leave salary on monthly basis.
As it's some sichwational based decisions that we have to take in some circumstances.
Please excuse me, as I am only seeking for my question answer and same i have asked to learned members with all due respect.
From India, Mumbai
Dear colleague,
Your following the practice of paying bonus to workers of Contractors on monthly basis is against the spirit and provisions of the PB Act. If the legislature had intended paying the bonus on monthly basis, it would have provided so but it has not. There is specific provision to pay bonus within 8 months from the closing of accounting year.
In other words, paying bonus on monthly basis is , although not specifically restricted by law, but by implications it has.
Keeping in mind the intent
and purpose of the PB Act, your practice runs counter to it.
But if you find this irregular practice to your advantage and the Inspecting machinery is allowing it by default , be merry and carry on with it.
Your logic for paying monthly bonus seems to prevent Contractor pocketing this amount paid to him by PE. taking advantage of the turnover of workers. But nothing stops from building proper checks and balances and after the Contractor has submitted statement of bonus actually paid to the eligible workers on yearly basis as provided in the law, you can release the payment to him after due verification.
You will appreciate that the above thoughts and that of other other learned members are arising only out of concern for proper compliance of law which is the responsibility of HR/IR Manager.
Regards,
Vinayak Nagarkar
HR- Consultant
From India, Mumbai
Your following the practice of paying bonus to workers of Contractors on monthly basis is against the spirit and provisions of the PB Act. If the legislature had intended paying the bonus on monthly basis, it would have provided so but it has not. There is specific provision to pay bonus within 8 months from the closing of accounting year.
In other words, paying bonus on monthly basis is , although not specifically restricted by law, but by implications it has.
Keeping in mind the intent
and purpose of the PB Act, your practice runs counter to it.
But if you find this irregular practice to your advantage and the Inspecting machinery is allowing it by default , be merry and carry on with it.
Your logic for paying monthly bonus seems to prevent Contractor pocketing this amount paid to him by PE. taking advantage of the turnover of workers. But nothing stops from building proper checks and balances and after the Contractor has submitted statement of bonus actually paid to the eligible workers on yearly basis as provided in the law, you can release the payment to him after due verification.
You will appreciate that the above thoughts and that of other other learned members are arising only out of concern for proper compliance of law which is the responsibility of HR/IR Manager.
Regards,
Vinayak Nagarkar
HR- Consultant
From India, Mumbai
Dear Ubaid Raheman ji,
Can you Please Clarify what is the % Bonus Paid on Monthly basis to Contract Employees? What is the Practice followed for Regular Employees-% of Bonus Paid, Paid Monthly?
are you preparing Bonus A&B Register? % of Bonus Paid is in line with contents of your Balance Sheet, from academic perspective
From India, New Delhi
Can you Please Clarify what is the % Bonus Paid on Monthly basis to Contract Employees? What is the Practice followed for Regular Employees-% of Bonus Paid, Paid Monthly?
are you preparing Bonus A&B Register? % of Bonus Paid is in line with contents of your Balance Sheet, from academic perspective
From India, New Delhi
Dear Mr. Srinath,
The % paid to the contract employees is 8.33% (Minimum) paid on monthly pro-rata basis. And bonus register in Form C maintain by contractors.
For on roll workers it's 20% and paid on yearly basis, end of the financial year [As per MOS]. Register A & B are maintain by Finance dept. However, Register C is maintain by HR.
From India, Mumbai
The % paid to the contract employees is 8.33% (Minimum) paid on monthly pro-rata basis. And bonus register in Form C maintain by contractors.
For on roll workers it's 20% and paid on yearly basis, end of the financial year [As per MOS]. Register A & B are maintain by Finance dept. However, Register C is maintain by HR.
From India, Mumbai
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