Can consecutive occurrence of loss for company be exemption in payment of Bonus?


Can consecutive occurrence of loss for company be a reason for getting exemption in paying of Bonus?
or is it mandatory it has to be paid to employees in any scenario?


Once you cross 5 years of business, an organization is liable to pay irrespective of the loss or profit. The amount may vary but that is the rule :slight_smile:

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Statutory bonus is a compulsory payment by law. Payment of statutory bonus under the Payment of Bonus Act is not a matter of choice of the employer but rather a matter of right of the employee. Only employees who have worked in an establishment for a period of not less than thirty (30) days in that year shall be eligible to receive bonus.

The Act contemplates that a minimum bonus of 8.33% of the salary or the wage earned by the employee during the accounting year or Rs. 100 whichever is higher should be paid to an employee.

If any person acts in any manner derogatory to the provisions of this Act he/she shall be penalised with imprisonment for a term which may extend to six (06) months or with a fine of Rs. 1000 or with both.

In certain circumstances payment of minimum bonus can be exempted by the appropriate government by taking into consideration relevant circumstances of concern factory or establishment which is in losses and may be given for a certain period only. The relevant factors may be, the reasons for occurrence of losses to company, reasons and ingenuity in consecutive occurrence of losses. The factors must be justifiable and there should not be intention to avoid payment of bonus by creating fake losses.