Bonus Act Flashcards
Q: How are branches and sub-branches treated regarding bonus calculations?
A: Branches and sub-branches are considered part of the enterprise for bonus determination.
Q: Can bonus distribution be discriminatory?
A: No, bonus distribution cannot be discriminatory based on employee performance.
Q: When should enterprises submit their balance sheet to the Labour Office?
A: Within 6 months after the expiry of the fiscal year.
Q: Who is eligible for a bonus?
An employee who has worked for at least half the period to be worked in a fiscal year.
Q: Who is NOT eligible for a bonus?
A: Employees working on a casual or shift basis.
Q: Under what circumstances is an employee NOT entitled to a bonus?
If they are punished or dismissed for:
Theft or damage to the enterprise’s property.
Illegal strikes or inciting others to strike.
Riots or breaches of discipline.
No restriction on obtaining a bonus before committing such acts (Bonus is proportionate to the workdays.)
Q: How/When is bonus payment made?
Always paid in cash.
Within 8 months after the expiry of the fiscal year.
What happens if an enterprise cannot distribute the bonus within the deadline?
They must file an application to the Labour Office for a time extension.
Labor office can:
Extend the deadline for a maximum of 3 months.
Allow the bonus for 2 years to be distributed in the next fiscal year.
Q: To whom can the bonus be given if the employee is eligible?
The employee, their authorized agent, or a family member.
Q: How are disputes regarding bonus payments resolved?
Through three methods:
1. Negotiation between management and employees in the presence of labour office.
2. Based on documents and statements submitted decision by Labour Office.
3. Appeal to labour court
By any dissatisfied party.
Within 35 days of the Labour Office decision.
The Labour Court’s decision is final.
Q: What percentage of net income can be distributed as bonus in advance?
A: At least 5% of net income after making tentative computation.
Q: What are the reasons for distributing bonus in advance?
Failure to submit Balance Sheet and Profit & Loss statement within 6 months after the expiry of the fiscal year.
Failure to distribute bonus within 8 months after the expiry of the fiscal year due to inquiry on financial statements by Labour Office.
Q: What happens if the distributed bonus is greater than the distributable bonus?
The excess amount shall be deducted in arriving net income of the next income year.
Q: How is the redistribution of the deficit bonus amount done?
The deficit amount is redistributed on a proportionate basis to the employees after adjusting the previously distributed amount.
Bonus by Gov owned enterprises
With profit motive
1. Monopoly Sector: 1% of NP
2. Non monopoly: 5% of NP
3. Loss: NA
Bonus by enterprises
10% of NP
What conditions must government-owned enterprises fulfill before distributing bonuses?
Expenses booked on an accrual basis in the earlier financial year have been paid in the next financial year.
Contingent liabilities have been determined and a separate fund established.
Loans from the Nepal government (or guaranteed by it) have been paid according to schedule.
Q: What is the maximum bonus for employees receiving up to 2 times the minimum remuneration?
Equivalent to “8 months” salary or wage.
What is the maximum bonus for employees receiving more than 2 times the minimum remuneration?
Equivalent to “6 months” salary or wage.
What is the minimum bonus for employees earning more than Rs. 34,600?
Not less than the maximum bonus receivable by an employee earning up to Rs. 34,600.
What is the punishment for contravening orders related to the Bonus Act?
A: A fine of up to Rs. 5,000.
Q: Who is liable for punishment if an enterprise commits an offense under the Bonus Act?
A person working as a manager in the enterprise at that time.
Appeal:
In the concerned High Court within 35 days of receiving the notice of the order.
Q: What happens to the bonus of employees who participate in an illegal strike?
A: They are entitled to a bonus for other days only, with a proportionate deduction for the striking days.
Q: What percentage of the undistributed bonus is deposited into the welfare fund for entities other than government-owned enterprises?
A: 70% of the residuary amount after bonus distribution is deposited into the entity’s welfare fund, and the remaining 30% is deposited into the National Level Welfare Fund.
Q: What percentage of the undistributed bonus is deposited into the welfare fund for government-owned enterprises?
A: 20% of the residuary amount is deposited into the entity’s welfare fund, and the remaining 80% is deposited into the National Level Welfare Fund
Q: What are the permitted uses of the welfare fund?
Immediate financial assistance for sickness/accident of worker/employee or their family.
Education of worker/employee or their children.
Sports, entertainment, library, club, etc., for worker/employee.
Loans at reasonable rates during extraordinary situations for worker/employee.
Relief activities for worker/employee during emergencies like natural calamities.
Other welfare activities for the collective interest of worker/employee.
Max bonus for Gov. owned entitites
Monopoly
Officer Level: 2 months of basis of starting salary scale
Lower Level: 3
Non monopoly
Offier: 3
Lower Level: 4
