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Every establishment, be it industrial or commercial, has to make provisions and make payment of Bonus to its employees, which include regular and contractual employees. However, there remain certain legal technicalities of deciding the eligibility and applicability of Bonus Act to certain organisations and on certain employee groups. Also, the question arises as to how to compute the Bonus of employees and how this is allocated in the Accounting System of the company’s Profit and Loss Accounts. The legal aspects of eligibility and payment of Bonus are dealt with by the following legislations :

  1. The Payment of Bonus Act, 1965
  2. The Payment of Bonus Rules, 1975
  3. The Code on Wages, 2019 and Draft Rules

For effective implementation and compliance, comprehensive legal understanding of relevant laws and rules is must for every employer/ compliance professional.

The Present program intends to update the concerned stakeholders to be aware of the legal provisions of eligibility, entitlement, calculation, payment, compliances and powers of deduction and disqualification of Bonus of certain employees in the establishments, which every employer and a HR professional must know for effective compliance.

Program Objectives –

  • Understanding the relevant legal provisions for Payment of Bonus Act & Rules
  • The Applicability of Bonus Act on certain establishments and newly set-up organisation ( Infancy period )
  • Know the applicability of Bonus on certain employees, including the Contractuals, trainees and apprentices and exclusion of others
  • Understand the Bonus Computation and Calculation criterion
  • Understand the conditions when Bonus of an employee can be deducted or forfeited. Latest legal provisions on this.
  • Whether the Bonus can be paid on monthly basis and adjustments of Bonus ?
  • Understanding the legal provision of Ex-Gratia payment and its provisions.
  • What is the time limit for payment of Bonus to eligible employees?
  • What are my compliance obligations of maintaining registers, records & returns?
  • What are penalties and fines for non-compliance under the Bonus Act ?

Program Synopsis

  1. Key provisions and Definitions under The Payment of Bonus Act and Rules
  2. Applicability of Bonus on Establishments and different category of Employees, including Regular, Probationers, Trainees, Apprentices and Contract Labours
  3. Payment of Bonus
    • Minimum and Maximum Bonus
    • Bonus in case of Newly Set-up Establishments ( Infancy Period)
  4. Eligibility of Employees for Bonus and Calculation of Bonus
  5. Rules for Bonus Accounting and Computation-
  6. Computation of Gross Profits
  7. Available Surplus and Allocable Surplus
  8. Set-on and Set-off of Allocable Surplus 
  1. Advance Payment of Bonus and Adjustment of Bonus
  2. Time Limit for Payment of Bonus
  3. Payment of Ex-Gratia – Obligati on of Employer to Pay ?
  4. Disqualification for Bonus and Deduction of Bonus – conditions thereof
  5. Compliances under the Act – Records, Registers and Returns required to be maintained under the Act/ Rules
  6. Offences and Penalties under the Act