PROFESSIONALS AND BUSINESSES PARTICIPATING IN DISCUSSION
Labour Law & Hr Consultant
Sr. Hr Executive
Insolvency N Gst Professional
Nagarkar Vinayak L
Hr And Employee Relations Consultant
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Shrikant_praDeductions permitted under minimum wages act does not include this type of deduction. As such this will be illegal deduction. Law overpowers if terms of appointment are incorrect or less favourable.
From India, Mumbai
nathraoPurpose of giving loyalty pay on monthly basis is not very clear.
Paying yearly is a better alternative and will incentivise employee to stay on, if other things are equal.
So reconsider the idea, as implementation of recovery may not be in legal order.
From India, Pune
To me, your proposal seems to be like the old wine in a new bottle. You've just changed the name of retention bonus as "Loyalty Pay" and revised its periodicity from yearly to monthly and introduced the practice of deduction from the F&F amount in the event of the employee leaving in the middle of the year without completing one full year of service. The scale you've indicated shows such employees are out of the purview of the Payment of Wages Act,1936 and even otherwise since it is a sum payable just for incentivising the employee to stay on it would not form part of the definition of the term wages under the Act. However, paying it monthly and recovering it later does not seem to be better than its denial if the condition is not fulfilled by the employee on his exit.
From India, Salem
Nagarkar Vinayak LDear colleague,
You have not given rationale for changing loyalty payment from yearly to monthly.
In my view your proposed change may prove to be hitting at the roots of the purpose of this payment besides the avoidable transaction in monthly mode of paying first and deducting later if he leaves midway.
Suggest you stay put with present yearly system of payment which is more advantageous keeping the purpose of loyelty payment in mind.
From India, Mumbai