On September 23, 2024, the Labour Department of the Government of NCT of Delhi issued a crucial advisory aimed at contractors regarding the payment of bonuses. As the festive season approaches, it’s essential for both contractors and principal employers to be aware of their legal obligations to ensure compliance with labor laws and the timely disbursement of bonuses to workers.
The Payment of Bonus Act, 1965 is a pivotal piece of legislation that mandates certain employers to pay bonuses to their employees based on profits. Specifically, the Act requires that contractors employing 20 or more workers are obligated to pay a minimum bonus of 8.33% of their salary. This payment is due within eight months following the end of the accounting year, which generally means before the festival of Deepawali.
Who is Responsible?
One of the critical points highlighted in the advisory is the statutory responsibility of contractors. They are required to ensure that bonus payments are made on time. Non-compliance can lead to serious repercussions, including prosecution and recovery of dues. This places the onus on contractors not only to manage their workforce effectively but also to maintain compliance with applicable labor laws.
Role of Principal Employers
The advisory also underscores the responsibility of principal employers. They must ensure that their contractors are following labor laws, particularly concerning bonus payments. This means that principal employers should proactively monitor and enforce compliance among their contractors to avoid any legal complications and ensure that their outsourced workers receive their entitled benefits.
Timely Bonus Disbursement
With Deepawali approaching, the Labour Department has urged all contractors to prioritize the disbursement of bonuses to their workers. Timely payment is not just a legal requirement but also a significant aspect of employee welfare. Bonuses can provide financial support to workers and their families during the festive season, making it all the more important for employers to adhere to these regulations.
The detailed notification is given in the pdf below.
