Payment Of Bonus Act, 1965 - Sneak Review

It was Diwali bash and being in HR we were busy in preparing the Bonus sheet for Payment, our boss came in and asked "Why should we pay bonus ? is this mandatory and in this FY we dint do well and Covid too came to ruin lives, get me a complete update".  So everyone jumped to google it and after 15 minutes discussion was on. Amid all this he came and handed over an advisory from a lawhouse that we should pay more Bonus than past years as we were earning good profit but dint pay employees good bonus. 

So here I put the silent features of the ACT and applicability. 

THE PAYMENT OF BONUS ACT, 1965

An Act to provide for the payment of bonus to persons employed in certain establishments on the basisof profits or on the basis of production or productivity and for matters connected therewith.

• This act is applicable to every registered factory with 10 employees or any organization employing 20 or more employees and is governed by the Central Govt.
• In any given Financial year (April-March) employee is eligible for Bonus calculated on available Surplus after deduction os income tax, direct taxes, development rebate, investment or development allowances. 
• For Company's point of View here is a simple idea to calculate amount of Bonus

Available Surplus = Gross Profit - deduction under section 6 + (Gross profit os previous year - direct tax on gross profile after Bonus)

Available Surplus is the amount payable as Bonus to employees.

• All the employees are eligible for bonus only when an employee has worked for minimum 30 days.t
• Minimum Bonus - For employees above age 15 yrs, Minimum bonus is 8.33% of the wages ( Basic+DA alone) or Rs 100 whichever is higher. FOr employees under 15 yrs of age its Rs 60 or 8.33% of wage whocher is higher. 
• As per recent amendments Employees earning wages elual or less than 21000 per month are eligle for bonus and minimum bonus capped is Rs 7,000.
• Maximum Bonus -In case the surplus is more that the minimum bonus payable is 20% of the total wage earned in the following FY.
• An Employee completing 5 years in service is eligible for bonus even if the company earns no gross profit. 
• in the same way an employee can be disqualified for bonus payment on Fraud, Theft, Violent bihaviour, riotous act, misconduct causing financial loss to the company etc. 
• For any financial Year the maximum time allowed for Bonus payment is 8 months. That means For FY April- March for a following year, bonus must be paid in the month of Oct or before that.

Details of the Act can be availed from any of the govt. websites. 

Hope you would have got answers to all your queries. 

Do comment  and share it.

Calm & Cool

 

Duggu

 

Lockdown and its different facets

Its been more than a month the prime minister declared nationwide Lockdown in view of the novel corona pandemic. When industry experts are mulling losses of different type and scale I must bring your attention towards the gains. Its not time for anyone to count the gains during deaths in thousand numbers across the globe but the show must go on and its the positives that drive us and not the negatives. So here are few take away from this lockdown.

• Its been clear that the most important thing in one life is relationships and definitely not money. I have witnessed many instances on the internet and tv that loads of money could not save precious lives in the west particularly in the US and Europe. To mention a few I read a news somewhere that in Brazil currency notes are laid on the streets and they are useless against the deadly disease.

• Money has little to offer but has not lost its charm. I drive this from a situation when thousands of migrant workers stranded in other states ran out of mere sum they earn daily. Their situation is like to choose between killers; corona or poverty.

• Man is not measured by his size of his pocket but by his size heart. There are many I have seen with ultimate luxury in life but I have seen people with very limited income has bigger hearts then anybody else as they come forward to donate and salute their generosity. 

• Nature is healing itself. Its a time when most of the countries are closed and people are inside their self made bunkers, nature is healing itself. Ozone layer is repaired as N2 release from industry exit has been minimal. Fishes who used to be seen in deep sea are hitting seashores. The Ganges to mention without the excreata from various sources was never so clean in recent years. Wild animals are taking a tour of the land they used to occupy once before man took over. You will find many instances and videos online.

• Another good aspect is the road accidents and death thereupon. With people inside houses deaths due to road accidents has been negligible as compared to numbers with traffic on the road. Can we all be little patient and careful on roads.

• To mention another point many rehabilitation centres and psychological medicines could not bring down the addiction levels from liquor/drugs or anything else. But yes there has been few cases to mention as suicides and deaths due to consumption of alternatives. We should work on them too.

• another point to mention here is that there are many habits that needed time and attention from individuals which has been achieved by most of the individuals. for example I never had the newspaper in my hand for over 15 minutes but lockdown has increased my timing to an average of 40mins to one hour. This will definitely improve my vocabulary & i hope to keep this up post this period. 

• Worst result of the lockdown is the number of domestic violence cases being reported when both the spouses spend more time together within the premises. These numbers are worrisome. Relationships need time and attention and lets be more sensitive to deal with them.

• Industry as a whole has lost crores and be it Manufacturing,  IT, Services and any other domain it is badly hit by this pandemic and all growth projections and business numbers is now been showed in very bad shape. Its is estimated that it will take at least two quarters to come back to normalization. The worst hit are the MSME sector which will face the toughest time ever and the Worst to face are the Start-ups. 

• This is followed by the unemployment across the industry and hiring rate too is going to be very low till next FY. Despite a call by the govt authority not to terminate jobs and salary cuts its been a very tough time particularly for the MSME sector and companies focused on liquid cashflow, there has bees salary cut up to 30 to 100%. Job losses and different in payment terms and worst as the terms of employment too is being changed. With the industry heading towards a definite slowdown employment and job loss will be the tough to be dealt by job aspirant and employees. People need to be patient and have self-confidence and belief. Time will change and hiring will see an upward curve. 

• Worst is the number of suicidal cases due to domestic violence and the financial situation risen from the job losses. Special attention needed in the cases of depression and different psychological ailments in patients suffering from depression and anxiety.

Despite the bad news about the industry slowdown and job losses we as a country should be thankful for the Govt. and the lockdown that the situation is not so grin as in the west where there are deaths in thousands and worsening day by day. I know its tough time for all of us but with a positive mindset we should deal with the situation.

Lets hope for the Best !

Chennai to continue under lockdown 2.0 till 3rd May 2020

Today TN Chief Minister E.Palaniswami took a review meeting witth the cabinet meeting and group of advisors on the ongoing lockdown caused by the COVID-19 pandemic and decided to continue the ongoing Lockdown 2.0 till 3rd  may 2020.

Stay Locked, stay safe

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