Hi Can a MNC company in India deduct Money from the Employee salary in the Name of retention Bonus and give it back after 3 years even if that mentioned in the Offer Letter. Is that legal in India?
From India, New Delhi
Dear Rockey,
"Retention Bonus" is a payment by the employer outside the regular salary paid to any key employee for ensuring his stay in the organization for a certain period during the phase of any crucial business cycle or any project yet to be completed. Therefore, I am at a loss to understand such an unheard practice of a retention bonus to be recovered in advance installments from the current salary of the employees to be paid after three years later. It would be better that you upload a copy of the offer letter in this regard for the perusal of the members.

From India, Salem
Dear Colleague,
As rightly said , we need to see the relevant clause in the Offer/Appt letter.
The Retention Bonus in this concern is future payment, payable only after completion of three years' service. The deduction of any amount towards payment yet not made is badly conceived and perhaps goes contrary to the very purpose.
What would have been approprate is to put condition that
if the concerned employee leaves before completing three years. service, he will not be entitled to receive the Retention Bonus.
Vinayak Nagarkar
HR- Consultant

From India, Mumbai

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