dear All
i have a very urgent question related to amendment in bonus act....Due to this amendment, those employees whose Basic is less than or equal to Rs 10,000 will now get Bonus.......Here lies a problem..........some of the employees in my company were getting Ex gratia previously ( which was a part of their CTC, and the % of Exgratia was much higher than Bonus obviously), but now due to the amendment, the company has paid them Bonus ...........so they have suffered a financial loss !!.........pls let me know whether the Company should compensate them since the employees are loosing out their money ( as it was a part of their CTC ) ...........what the other companies have done .......have they compensated the employees or not? kindly advise.
Thanks
Ritu Agarwal
From India, New Delhi
i have a very urgent question related to amendment in bonus act....Due to this amendment, those employees whose Basic is less than or equal to Rs 10,000 will now get Bonus.......Here lies a problem..........some of the employees in my company were getting Ex gratia previously ( which was a part of their CTC, and the % of Exgratia was much higher than Bonus obviously), but now due to the amendment, the company has paid them Bonus ...........so they have suffered a financial loss !!.........pls let me know whether the Company should compensate them since the employees are loosing out their money ( as it was a part of their CTC ) ...........what the other companies have done .......have they compensated the employees or not? kindly advise.
Thanks
Ritu Agarwal
From India, New Delhi
Since it was earlier a part of their ctc therefore you have to compensate them. You may pay the balance amount after deducting the bonus amount from the total sum. Regards Ritul Pathak
From India, New Delhi
From India, New Delhi
dear Ritul
thanks for replying....even we thought so........ideally this should be done if it was part of CTC, however do u know if any company has taken that step ? ..........( i mean in this scenario of global economy crunch )
thanks
Ritu
From India, New Delhi
thanks for replying....even we thought so........ideally this should be done if it was part of CTC, however do u know if any company has taken that step ? ..........( i mean in this scenario of global economy crunch )
thanks
Ritu
From India, New Delhi
Dear Ritu,
Am I correct in understanding that previously if there was an employee x earning Rs 9,000/- and employee y earning 11000/- then both were getting a % as ex gratia bonus.
Now because of the amendment, the employee who is earning Rs 9,000/- has his bonus restricted to Rs. 8,400/- and employee 'y' continues to get his old bonus?
and this was part of the ctc and now changes only for those who fall under the amendment bracket of applicable bonus recipients?
If this is the picture , it cannot be!
do let me know
From India, Kochi
2Am I correct in understanding that previously if there was an employee x earning Rs 9,000/- and employee y earning 11000/- then both were getting a % as ex gratia bonus.
Now because of the amendment, the employee who is earning Rs 9,000/- has his bonus restricted to Rs. 8,400/- and employee 'y' continues to get his old bonus?
and this was part of the ctc and now changes only for those who fall under the amendment bracket of applicable bonus recipients?
If this is the picture , it cannot be!
do let me know
From India, Kochi
dear Joseph
yes, u have understood correctly........pls advise what should we do with employees of 'X' category ?.......pls advise what the other Companies have done ? Here the exgratia was part of their CTC.......
Case No 2......For some of the employees , ex gratia was never a part of CTC , however they have been getting Ex gratia as a matter of practice since so may years( their Basic was less than Rs 10,000).....but now due to amendment in Bonus act, they have been paid Bonus ( and not exgratia).....so what should we do in such cases
kindly advise pls....thanks a lot
Ritu
From India, New Delhi
yes, u have understood correctly........pls advise what should we do with employees of 'X' category ?.......pls advise what the other Companies have done ? Here the exgratia was part of their CTC.......
Case No 2......For some of the employees , ex gratia was never a part of CTC , however they have been getting Ex gratia as a matter of practice since so may years( their Basic was less than Rs 10,000).....but now due to amendment in Bonus act, they have been paid Bonus ( and not exgratia).....so what should we do in such cases
kindly advise pls....thanks a lot
Ritu
From India, New Delhi
You cannot find the term CTC in any Labour Act to describe your salary. The eligibility of bonus is not at all depended upon what your company costs by employing you but it is the basic salary and the dearness allowance you get. If your Basic salary + Dearness Allowance is not more than Rs 10000, you are eligible for bonus. But the bonus will not be calculated on the total gross of basic +DA but it is restricted to Rs 3500 per month only. That is, even if you get Rs 10000, your bonus will be calculated as if you were getting Rs 3500.
The exgratia mentioned in the appointment letter as part of CTC should be treated as a monthly payment and not bonus which is paid once in a year. More over the Bonus Act is meant for payment of Bonus and not exgratia. And it is illogical to deprive the employees of any benefits they are getting just due to an amendment in the Act.
Regards,
Madhu.T.K
From India, Kannur
The exgratia mentioned in the appointment letter as part of CTC should be treated as a monthly payment and not bonus which is paid once in a year. More over the Bonus Act is meant for payment of Bonus and not exgratia. And it is illogical to deprive the employees of any benefits they are getting just due to an amendment in the Act.
Regards,
Madhu.T.K
From India, Kannur
I'm in complete agreement with Madhu T. K.
you cannot decrease an agreed remuneration thru amendment which is irrelevant to the agreed remuneration.
as suggested by vgk pay the rest in monthly salary as special allowance (taxable)
From India, Kochi
you cannot decrease an agreed remuneration thru amendment which is irrelevant to the agreed remuneration.
as suggested by vgk pay the rest in monthly salary as special allowance (taxable)
From India, Kochi
Dear,
what I know is, if you fall in the bracket of the Basic + DA as given under the bonus act then the amount which is given is termed as bonus and if you draw a higher Basic + DA then you are given as ex-gratia. Both the amouns are reflected in the Form D. Annual Return of Bonus Act to be submitted 30 days after disbursement of Bonus in the organisation
Sanjeev
From India, Pune
what I know is, if you fall in the bracket of the Basic + DA as given under the bonus act then the amount which is given is termed as bonus and if you draw a higher Basic + DA then you are given as ex-gratia. Both the amouns are reflected in the Form D. Annual Return of Bonus Act to be submitted 30 days after disbursement of Bonus in the organisation
Sanjeev
From India, Pune
You could do a couple of things.
First and foremost, change the nomenclature of the Ex-Gratia payment to 'Bonus' and ensure that the same is reflected on the payslip.
Secondly, you could try and communicate to all employees vide a general circular (ideal during annual increment time), and inform tham the the ex-gratia amount being paid to them was in fact bonus as the intention of the management was to pay bonus but since they were not eligible for the same, it was being paid under a different head and also much higher than the stautory requirement. What needs to be effectively communicated is that the CTC of the individual is not adversely affected in any way.
Hope this helps .....
Innovation
First and foremost, change the nomenclature of the Ex-Gratia payment to 'Bonus' and ensure that the same is reflected on the payslip.
Secondly, you could try and communicate to all employees vide a general circular (ideal during annual increment time), and inform tham the the ex-gratia amount being paid to them was in fact bonus as the intention of the management was to pay bonus but since they were not eligible for the same, it was being paid under a different head and also much higher than the stautory requirement. What needs to be effectively communicated is that the CTC of the individual is not adversely affected in any way.
Hope this helps .....
Innovation
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Bonus act amendment gazette copy.pdf
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