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: Define the Payment of Bonus Act's objective. Step 1: The Payment of Bonus Act requires employers to share profits with employees, with the bonus amount tied to the establishment's profitability.
Step 2: Analyze the characteristics of charitable hospitals.
Step 2: Charitable, or non-profit, hospitals function without a profit goal. Any surplus is used to further the organization's mission, not for distribution to owners.
Step 3: Connect the Act's goal with the organization's nature.
Step 3: Because "profit" is not relevant to non-profit organizations in the same way, they are generally exempt from the Payment of Bonus Act. Other listed acts (Industrial Disputes, Minimum Wages, Payment of Wages) address basic employee rights and working conditions, and usually apply to all establishments, including charitable ones.