Dear Tarun,
It seems that your management is quiet concern for the employee welfare as such my freinds have given you many sugestions from which you can choose the best suitable to your organisation.
But other than this the employees problem will not be solved for you need to give options like,
1) They can withdraw PF amount non-refunable loan or
2) You can form a co-operative society internally or
3) A different account in bank wherein regularly all employees voluntarily deposit the money which can be used by them later on as without interest loan.
But, presently whatever advance policy is very harmful.
Sandeep Kulkarni

From India, Vadodara
In our organiation, the advance salary is given only for few grades and that too for staff & workers.
we give the advance loans only when the previous advance is completely settled and after one yr from the date of advance given.
in the similar way, speak to ur mgmt and ask which all grade employees, do it, set a lower limit as well as a time period for recovery (justified one). and if still an urgency has occured and the mgmt completely feels it genuinity, then as a special case it can extended.
You can also start taking the interest, if the amount is taken under certain specified bracket. this may reduce the requirements/demand.
although in the initial period, it may create bit problems / unrest, but later on once the things are settled there should not be any problem.
After all the policy should be taken for granted.

From India, Delhi
Bipin has right point.. and you have have to revise your advance salary policy.. but this reactive strategy could offend your employees.. so make changes transparently by making slow steps...
From India, Coimbatore
Dear All
I am already planning to revise my current advance salary policy, but as rightly said by Mr. Jawahar that a sudden change could bring a negative feeling amongst the employees. Moreover, in our policy the provision of producing documents is missing like, if somebody avails advance for marriage then he needs to produce the marriage card which now I am planning to incorporate.
I once again thanks to all seniors and my friends for their helpful opinions.

From India, Delhi
say if salary is 10000/=
1- salary advance will be given after 10 of every month.
2- you can draw salary advance two times but should be less than 70% (below 7000)
3- when you will re imurbse salary than only remaining amount will be given. like 3000

From Pakistan, Karachi
Actually you can make the policy that any employee can take only 2 or 3 time salary advance in any year. that can reduce the repeatation of employees.
From India, New Delhi
You can also put controls like -
1. Only for permanent full time employees
2. Min. association time with the organization - 6 months
3. Approval mechanism - HR, Supervisor and Function Head
4. Eligibility Criteria - e.g. Medical reasons, Own Marriage etc.
Hope it will help serve the purpose.

Dear Tarun,
Don't restrict the salary advance policy but make sum addition like salary advance can be taken but upto the net salary rounding it off to lower value and should get deducted in coming salary and made an emergence loan policy in addition to it in which an employee can take short term loan max upto three salary which will be deducted in 5 EMI and this the employee can take once in a year. this will not demotivate them and your burden of giving advance of huge amount will reduce.

Hi Tarun,
You can add some points to your policy:
Salary advance would be available to those employees only who have completed 6 months (or 1 yr, depending on the attrition rate of the organization) of tenure.
The amount would not exceed the due salary amount for the month as on date of application.
For the help of employees u can create a fund by deducting an amount from their salary that would be paid after completing a tenure of 3/6/9/12 months.
U can organise some trainnings on money management, investment, savings etc.
Try to find out the root cause that motivates them to take an advance and then go for the appropriate solution.

From India, Indore
Hey Tarun,
I'll suggest u to make a new policy named "Emloyee Welfare Fund". U need to fixed sume amount such as Rs.500 from each employee's salary. Once the amount is collected that should be kept into new account named "Employee Welfare A/c" so, that simultanously u would get the interest.
Then u can easily able to manage the amount to them without any interest in sort of loan or advance salary. U need to keep few things in mind that the amount limit should be fixed and duration of refundable., how many times one employee would be eligible to take loan in an year such as twice or thrice.....
This should be updated into Appointment Letter and Salary Slips.

From India, New Delhi

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