Question

The charitable or not-for-profit hospitals are exempted from which Act?

• A. Industrial Disputes Act, 1948
• B. Payment of Bonus Act, 1956
• C. Minimum Wages Act, 1948
• D. Payment of Wages Act, 1936

Hint:

Remember that a "bonus" under this act is tied to profit. If an organization is "not-for-profit," it logically follows that an act based on profit sharing would not apply.

Answer 1

The Correct Option is B

Step 1: Understand the purpose of the Payment of Bonus Act. Step 1: The Payment of Bonus Act mandates that employers share a portion of their profits with their employees. The bonus is linked to the profitability of the establishment.
Step 2: Consider the nature of charitable hospitals.
Step 2: Charitable or not-for-profit hospitals, by definition, do not operate with a profit motive. Any surplus generated is reinvested into the organization's mission rather than being distributed to owners.
Step 3: Relate the Act's purpose to the organization's nature.
Step 3: Since the concept of "profit" does not apply to non-profit organizations in the same way, they are generally exempted from the Payment of Bonus Act. The other acts listed (Industrial Disputes, Minimum Wages, Payment of Wages) relate to fundamental employee rights and working conditions and are typically applicable to all establishments, including charitable ones.