We are a Sugar Factory and thus seasonal in character. We pay retention allowance to our workers during off season. Please advise us whether retention allowance is a wage for the purpose of computing bonus.
Normally the seasonal workers, employed in sugar factories, as per the terms of employment, are paid retention allowance during the off season. The definition of salary or wage under section 2(21) of the Bonus Act includes all allowances paid as per the terms of employment or contract of service excluding the exceptions specified in the section. Retention allowance does not fall under any of the excluded categories. Therefore it forms part of wages for the purpose of Bonus Act. Please refer to Bhag Sahakari Karkhana v. Rashtriya Sakhar Kamgar Union., 2001 III LLN 552 (Bom.HC)
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