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Ritesh Shah - Owner @ Job Seeker Hq
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Thread Started by #d2@123

I have searched google and didnt get much information about the variable pay out system in india. I work in a software firm. Variable pay is a component in my Offer letter and it is based on the company performance as well as individual performance from the period (Jan to dec 2012)

I would like to know the following things

(1) If i resign from the company in 2013 after working for the above mentioned period (Jan to dec 2012) and performed well, am i eligible for variable pay. Since i have worked for the period during which variable pay is calculated and the same is mentioned in the offer letter of that year, i believe i should be eligible for variable pay.

(2) As per company only employees who are in the pay roll while rolling out the variable pay is eligible for the same. Company will me rolling out incentive only in august 2013. Can company insist on this after calculating variable pay based on the performance from jan to dec 2012.

(3) The problem that an employee facing is, if an employee resigns during the period say jan to july 2013, he will not get variable pay of last year(2012) since company will roll out the variable pay only in august 2013 also he is not eligible for variable pay for the current year 2013.

Is there an labor law to solve this issue. Please give me the answers for above points.

Thank you
22nd August 2013 From India, Kochi
Firstly do let us know whether you are employed in Foreign company or an Indian Company, usually in India the Variable pay are accounted as per the Financial Year and not the Calendar year.
With regards to your query you have to contact the HR who will be the right person to guide you. In a nutshell if your company is a professional company then they would not hold your variable pay. You are eligible for every single month for variable pay for which you have worked with them, its a part and parcel of your emoluments.
22nd August 2013 From India, Ahmadabad
Thank you for the fast reply. I work in an indian company. And in my company variable pay is calculated based on the performances from jan to dec. Can you please give me more explanation on each of my queries. Thank you very much.
22nd August 2013 From India, Kochi
I would like to know the following things

(1) If i resign from the company in 2013 after working for the above mentioned period (Jan to dec 2012) and performed well, am i eligible for variable pay. Since i have worked for the period during which variable pay is calculated and the same is mentioned in the offer letter of that year, i believe i should be eligible for variable pay.Yes you are eligible for Variable Pay

(2) As per company only employees who are in the pay roll while rolling out the variable pay is eligible for the same. Company will me rolling out incentive only in august 2013. Can company insist on this after calculating variable pay based on the performance from jan to dec 2012.If you are rolled out before the variable pay is declared the company may hold the incentive till your FNF

(3) The problem that an employee facing is, if an employee resigns during the period say jan to july 2013, he will not get variable pay of last year(2012) since company will roll out the variable pay only in august 2013 also he is not eligible for variable pay for the current year 2013.If there is any standing order for the same then the employee is not eligible otherwise employee is eligible to get the variable pay till his last date of working with the company
22nd August 2013 From India, Ahmadabad
Thank you for the reply. In the point 3 . "If there is any standing order for the same then the employee is not eligible otherwise employee is eligible to get the variable pay till his last date of working with the company"
Can you tell me what exactly "Standing order " means is it the company policy or government labor law.
Thanks you
22nd August 2013 From India, Kochi
Normally Standing Orders are made by Manufacturing industries as per Factories Act and since yours is software firm comes under Shops & Establishment Act company policy will come into effect.
22nd August 2013 From India, Ahmadabad
So i like to know whether it is legally correct to have a policy as i mentioned in point 2.
23rd August 2013 From India, Kochi
Dear D2@123,
Do you have a variable pay policy in your company? refer to it, if these terms are mentioned in it then you cannot contest.
Didn't you ask your recruiter about the variable % and the payout cycle at the time of joining?
Most IT companies have a similar variable policy, they don't pay variable pay if the employee is on notice at the time of disbursement. The only way to safeguard against this is to negotiate for higher fix salary when you switch you job.
Regards,
Ritesh Shah
23rd August 2013 From India, Pune
Company policies are circulated to each employees which is read and accepted by the employees, so once it is accepted by the employees there is hardly anything left for legal to do.
In other words employer has put forth the terms and conditions and employees have accepted it and thereafter if problem arise employees seek legal action against the employer.
24th August 2013 From India, Ahmadabad
I have a similar issue. I would like to make a few points:
1. While joining I checked with the policies of the company and they had variable payout policy which allowed variable payout every quarter.
2. The company was changed from Limited to Pvt Limited and policies where also changed which included variable payout policy which changed to variable payout to be paid annually and date declared by the management.
3. Also variable payout would be paid to employees on the rolls of the company as on the date of the payout.
4. now my question is, It is an open- ended thing, since the date of payout is in the hands of the management and they can extend it till almost the Q3 of the subsequent year. how ethical is that?....Any wayout in case of disagreement with such policies without quitting the job ?
24th August 2013 From India, Mumbai
To be honest with you there is no way out. You have to adhere to such policies.
25th August 2013 From India, Pune
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