Why Indians should thank the British for the Diwali Bonus

The month of Diwali is the most exciting month of the year for salaried employees in India. With bated breath, employees wait for Diwali bonuses which are given to them by their employers.

But have you ever wondered who started the tradition of the Diwali bonus? Do you also know that after independence, the government of India enacted a law in 1965, called The Payment of Bonus Act, making it mandatory for companies to give Diwali Bonus to employees?

So, before you receive your Diwali bonus in your account, here’s taking you through a brief history of this.

Where it all began

• Before Independence, employees in India were paid on a weekly basis by all the institutions and organisations.
• What it means is that employees received 52 salaries in a calender year.
• But when the British rule began in India, they introduced the monthly salary system in which the employees were paid for 12 months, meaning 48 weeks.
• What it means is that the employees were losing the salary of 4 weeks compared to their previous salary system, where they were paid for 52 weeks.
• People soon realised that this was a loss for them, and hence protests began.
• In 1940, the British came up with the solution to give the 13th month salary during Diwali, which was the biggest festival in India.
• This came to be known as the Diwali Bonus after Independence.
• The government of India came up with a law in 1965 when it realised that several companies were not paying employees the 13th month salary in the form of bonus.
• Thus, the Payment of Bonus Act was enacted in 1965, which provided a minimum of 8.33% of the wages to the employees.

  

   

Companies rewarding employees in this month

• Delhi Chief Minister Arvind Kejriwal has announced a Rs 7,000 bonus for all Group B non-gazetted and Group C gazetted employees of the government.
• Similarly, a pharmaceutical company in Haryana, Midst Healthcare, has gifted cars to its employees as Diwali bonus.
• Similarly, a tea estate owner in Tamil Nadu has gifted Royal Enfield bikes to 15 of its employees, as part of pre-Diwali gifts. 

What did your company gift you? Let us know in the comments.