Umakanthan53
Labour Law & Hr Consultant

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Hi All,
We are a small set up with a strength of 30 odd employees. One new employee has joined the organisation. The management has planned to pay his 70% salary from one company and 30% salary from the the sister company.
My question is do we have such policies of paying salary of employee from two different company accounts with different entities.
Can you please help me to sought out this query..
Thanks,
Priya

From India, undefined
Dear Priya,
There is no such term "sister company" under the Companies Act,2013. Despite the common ownership, in the absence of functional integralty and common balance sheet, each company is an independent legal entity. Therefore, if an employee is appointed by and actually employed in a particular company, how a portion of his salary can be paid from another company? If you do so according to your convenience, the employee may not object to it as long as he receives the salary mentioned in his contract of employment. But, it would be bad or improper accounting procedure. One cannot ride two horses with one arse is equally true like that one cannot serve two masters.

From India, Salem
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