Recruitment Industry Appointmnet Letter With Variable Pay Clause - CiteHR
Maulik Dave
Hr Professional

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We are setting up a recruitment company and was wanting format for appointment letter with variable pay clause, leave policy and termination letters. Also information on industry standard variable pay structures , incentive schemes would be helpful. This is for the recruiters that we would be hiring. Thank You
@ PB2015,

Good afternoon......!!!!!!

Before suggesting something, I would like to know what percentage of variable pay you are planning to give to the recruiter. Because as you said HR consultancies are having incentive schemes on Number of Recruitment they are giving. & Of course what is your break-even point for hiring one recruiter can define your query with more ease.

Talking about industrial standards, I don't feel there is any defined standard for Veritable pay in Recruitment Industry. Because it depends upon for which industry you are working on hiring. Example : You will get good "sales executives" hired easily but its difficult to hire "Odoo Developer" (IT profile).

Best Thing you can do is fix Recruiters pay & tell him on 20+ Hiring you will get incentive on each hiring. If not hired (on payroll) 14 - Basic profiles you will get 20% salary deduction & 2 months down line termination of job.

For Leave policy, you can decide based on Shops & Establishment ACT applicable to you city. But it also depends on that you are 5 or 6 day working company.

Revert in case you required more information on the same.

All the best for lucrative business.

Thanks Maulik for your reply. To answer your questions we are thinking of having 50% fixed and 50% variable. There would be a further an incentive scheme on achieving targets. Something based on what you have suggested -

"Best Thing you can do is fix Recruiters pay & tell him on 20+ Hiring you will get incentive on each hiring. If not hired (on payroll) 14 - Basic profiles you will get 20% salary deduction & 2 months down line termination of job" . Yes the idea is to have a deduction and termination. It would be great if there is a clause on how we can word it.

We are in New Delhi and will be working 5 days a week. So what is theminimum earned leave that we need to give and also what is the difference we make it six days a week? So should i refer to the Delhi Shop & Establishment Act? Also one clarification other than the three national holidays which are compulsory are the other holidays ( festival) how many are compulsory or they can be given instead of casual leave. Thanks and appreciate your help.

@ PB2015,
1) Salary Structure of Recruiter.
I would like to suggest, kindly fix your criteria to make your company payroll process easy. As you said "50% Fixed and 50% variable." So, you need to define how "Variable Pay" affects their salary.
Means, if they are getting total salary 20K So bifurcation may be 10 K Fixed + 10 k Variable. Now you have to define to get the remaining 10 K, how many recruitment the recruiter has to give. If you will define it, you will get the "Minimum Numbers of Recruitment" to get full salary (20 k).
Now, Talking about INCENTIVE (More then 20 K salary) you can decide above "Minimum Numbers of Recruitment" the more recruitment Recruiter will get more incentive, But it has to be written & defined clearly in the appointment letter.
2) Delhi Shops & Establishment Guidelines to decide leave policy
:::::::::::::::: Delhi Shops & Establishment says following ::::::::::::::::::::::::::::::
{{{{ Every person employed in an establishment shall be entitled :
(a)after every twelve months', continuous employment, to privilege leave for a total period of not less than fifteen days;
(b) in every year, to sickness or casual leave for a total period of not less than twelve days;
Provided that
(i) an employee who has completed a period of four months in continuous employment, shall be entitled to not less than five days privilege leave for every such completed period; and
(ii) an employee who has completed a period of one month in continuous employment, shall be entitled to not less than one day's casual leave for every month.
Provided further that a watchman or caretaker who has completed a period of twelve months in continuous employment and to whom the provisions of Section 8, 10, 11, 13 and 17 do not apply by virtue of an exemption granted under Section 4, shall be entitled to not less than thirty days' privilege leave.
(i) Privilege leave to which an employee is entitled under clause (a) of sub-section (1) or under any such law, contract, custom or usage, award, settlement or agreement as is referred to in section 3, or any part of such leave, if not availed of by such employee, shall be added to the privilege leave in respect of any succeeding period to which he is so entitled, so however, the total period of such privilege leave which may be accumulated by such employee shall not at anyone time exceed three times the period of privilege leave to which he is entitled after every twelve months' employment under that clause or under such law, contract, custom or usage, award, settlement or agreement.
(ii) Leave admissible under clause (b) of sub-section (1) shall not be accumulated].
If an employee entitled to leave under clause (a) of sub-section (1) of this section is discharged by his employer before he has been allowed the leave, or if, having applied for and having been refused the leave, he quits his employment before he has been allowed the leave, the employer shall pay him full wages for the period of leave due to him. }}}}
By, reading above you can imagine that,
1) The working days should be 5 or 6 In context to you business which is new. More working days / hours more business. & you need to follow the govt. rules to run the business smoothly. Leave policy you can decide now.
2) Your last query, apart from National holiday the public holidays declared compulsory by Delhi State Govt. should must be given as compulsory holiday & can not be adjusted to casual leaves.
I hope the doubts are clear.
Do write to me in case of further query.

Thank you for your response. Really appreciate it. So what I understand that the number of leaves are the same whether it is 5 days working or 6 days working. Right?
Also reading through the Delhi Shop Act I see that the maximum number of hours a person can work for is 48 hours in a week. What i am not clear is that does it include time for breaks and lunches or it is 48 working hours plus lunch and breaks. Thank you in advance.

1) Yes, you need to provide the paid leave as given in The shops & Establishment act. No matter you are working 5 days or 6 days. The business prospective is 6 days working will attract more business & 5 days working will attract more recruiter.
2) Actually 48 hours are maximum hours that you can make any employee work (Excluding Break) for a week. Now you decide it based on working day. Like for 5 Days working company You can decide 9.6 Hours per day & for 6 Days working 8 hours per day. which again not violate the govt. Law.
All I can suggest is kindly take a wise business decision.
All the best

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