Test: Employees Compensation Act(1923) - B Com MCQ

According to the Fourth Schedule, the maximum bonus to which all employees are entitled to be paid is Rs. 2,50,000. This is calculated as twenty percent of the annual salary or wage of all the employees. Interesting additional fact: The maximum bonus payable to employees is limited to twenty percent of the total salary or wage of the employees in the establishment for that accounting year.

If the allocable surplus exceeds the maximum bonus payable to employees in an accounting year, the excess is carried forward for being set on in the succeeding accounting year. This means that the excess amount can be utilized for the purpose of payment of bonus in the future. Interesting additional fact: The maximum amount that can be carried forward for being set on is limited to twenty percent of the total salary or wage of the employees in the establishment for that accounting year.

If there is no available surplus or the allocable surplus falls short of the minimum bonus payable to employees in an accounting year, the minimum amount or deficiency is carried forward for being set on in the succeeding accounting year. This means that the minimum bonus that could not be paid in the current year can be paid in the future. Interesting additional fact: The set on and set off principle applies to cases where there is neither excess allocable surplus nor sufficient amount carried forward for payment of bonus. It ensures that the minimum bonus is eventually paid to the employees.

The set on and set off principle applies to all other cases not covered by subsection (1) or subsection (2) for the purpose of payment of bonus under this Act. This principle allows for the carrying forward and utilization of surplus or deficiency in subsequent accounting years. Interesting additional fact: The set on and set off principle ensures that any excess allocable surplus is not wasted and can be utilized for the payment of bonus in the future. It also ensures that any shortfall in allocable surplus is eventually made up for.

According to the time limit for payment of bonus, all amounts payable to an employee by way of bonus should be paid in cash by the employer within a month from the date on which the award becomes enforceable or the settlement comes into operation, in case there is a dispute regarding payment of bonus pending before any authority under section 22. In any other case, the payment should be made within a period of eight months from the close of the accounting year. Interesting additional fact: The time limit for payment of bonus ensures that employees receive their bonus in a timely manner, either after the resolution of a dispute or within a set period of time after the close of the accounting year.

An employer can deduct the amount of loss caused by an employee's misconduct from the bonus payable to the employee if the employee is found guilty of misconduct causing financial loss to the employer in any accounting year. This deduction can only be made for the specific accounting year in which the misconduct occurred. Interesting additional fact: The deduction of the amount of loss from the bonus serves as a form of disciplinary action and ensures that employees are held accountable for their actions that result in financial loss to the employer.

If an employee is found guilty of misconduct causing financial loss to the employer in any accounting year, the employer has the right to deduct the amount of loss from the bonus payable to the employee for that specific accounting year. The employee is then entitled to receive the balance of the bonus after deducting the amount of loss. Interesting additional fact: The deduction of the amount of loss caused by an employee's misconduct from the bonus ensures that the employee is held responsible for their actions while still receiving a portion of the bonus they are entitled to.

According to the Fourth Schedule, the total set on or set off carried forward in the sixth accounting year is Rs. 60,000. This amount represents the surplus or deficiency carried forward from previous accounting years that can be utilized for the payment of bonus in the current year. Interesting additional fact: The set on or set off carried forward from previous accounting years can help adjust the bonus payment based on the available surplus or deficiency in each year, ensuring that the bonus amount is fair and reasonable.

The period for payment of bonus can be extended by the appropriate Government or specified authority for a maximum period of two years. This extension can be granted upon application by the employer and for sufficient reasons. Interesting additional fact: The extension of the period for payment of bonus allows for flexibility in cases where there may be delays or disputes, ensuring that the bonus is eventually paid to the employees.

When calculating bonus for the succeeding accounting year after carrying forward set on or set off amounts, the principle that applies is the principle of set on and set off. This means that the amount carried forward from the earliest accounting year, whether as surplus or deficiency, is taken into account first. Interesting additional fact: The principle of set on and set off ensures that any surplus or deficiency in bonus payment from previous accounting years is considered when calculating the bonus for the current year, resulting in a fair and balanced distribution of bonus to employees.