Monica_p
Consultant
RamyaRanjan
Hr Executive
+1 Other

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Hi everyone,
I have a serious case here where the company is losing money on employees. And it's not fair losing money on employees who do not perform.
The thing is that the HR administration closes on the 20th of the month (absences/sickness etc.). This information then goes to Payroll department, but the payroll department pays the employees for 1st of the month until 30/31st of the month. So anything that happens between 20th and 30/31 will be deducted or included on the next month salary payroll.
But, since employees know this. After receiving their money on the 25th of the month, they resign. But the company already paid them until 30/31st of the month.
Especially for a new started company, this is not something we can tolerate but still we seem helpless because now we cannot deduct.
Is there any solution? How do other companies do it?
Please help/advise.
Regs,
Vishkrish
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Dear Vishkrish,
There are ways you can handle the situation. Below I have mentioned two points which came in my mind.
- You can keep your payroll from 01st to 30th/31st every month. However attendance should go to your payroll department on the last day of the month. Once they receive it they can either stay back and release the salary on 01st of every month or you can change your salary date to 2nd or 3rd.
- You can change the cycle from 24th to 25th of every month and they pay on 1st.
If you guys are start up then employees will be less in the company your payroll department can stretch a little to do the needful.
Dear Vishkrish,
If your HR administration closes the month on 20, then why does your payroll dept. continues to calculate for the remaining days of the month?. You can redesign your payroll process in accordance to the HR administration.
Calculate the month from 21 to 20 (say from Jan 21 to Feb 20 ) as 1 month and pay on 21st of Feb as salary for January month. Start from 21st of Feb as another month and continue it till 20th of March and then pay on 21st of march as salary for February. In this process if an employee leaves on say 25th of February, then you can pay from 21st to 25th i.e for 5 days for the month of March, as February has ended on the 20th for your payroll system.
Regards,
Ramya Ranjan
Further to pushing your cycle ahead to 25/26th each month, you can inform this to employees while joining only. You can deduct the excess salary from full and final settlement of employee's dues.
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