In India, the Diwali bonus is not legally mandatory for all employees, but it is a common practice in many businesses, especially in private companies and factories. Whether or not a Diwali bonus is given, and the amount of it, typically depends on the company’s policies, the employee’s status, and the applicable labor laws.
Diwali Bonus as a Cultural Tradition: In many industries, especially manufacturing and retail sectors, giving a Diwali bonus is a long-standing cultural tradition. This bonus is often seen as a goodwill gesture from the employer, enhancing employee satisfaction and morale during the festive season. However, this is not mandated by law but rather is a voluntary practice adopted by employers.
Exceptions:
- Small Businesses: Small businesses and organizations with fewer than 20 employees are not obligated by law to provide bonuses, though many do so as a goodwill gesture during Diwali.
- Government Employees: For government and public sector employees, bonuses may be awarded based on their salary grade, but this is generally not tied to the Diwali festival specifically. However, they might receive additional benefits or ex-gratia payments during festive times.
Conclusion:
In summary, the Diwali bonus is not legally mandatory in India, except where it overlaps with the statutory bonus requirements under the Payment of Bonus Act. However, due to cultural expectations and long-standing traditions, many companies choose to provide a Diwali bonus as a gesture of goodwill, particularly in industries like manufacturing, retail, and private enterprises.