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I currently started working in a firm. The employees of this firm resigned without giving notice and then they don't pay their dues (advance taken advance salary). Is there any way which firm can follow to ensure after employees' resignation from the company doesn't face the same problem?
From India
Vaishalee Parkhi

Hello Sushmita,

It is advisable to make rules w.r.t. Salary Advance i.e. a prescribed form to avail Salary Advance, approval by reporting manager, what percentage of Salary advance will be possible and when it has to be recovered.

Brief the rules to your staff after you design it. Hope it helps.

From India, Pune

Dear Sushmita,
I think you need to give a clear narration before asking the question.
Whether any notice period is prescribed in the service rules or the appointment letters?
If so how you accept the resignation and relieve the employee without serving the notice period or buying it back and clearing the balance of the advance already paid?
If the employees stop coming to work as soon as they submit their resignations without waiting for other formalities, what action you have taken?
Rejected the resignation?
Declared them unauthorised ly absent and initiated any disciplinary action?
Is it a regular practice in the organization to give pay advance as and when asked by the employees?
Better, please give clear-cut answers to the above questions?

From India, Salem
Dinesh Divekar

Dear Ms Sushmita Roy,

I find two issues in your post. The first one is that employees resign but do not complete their notice period. Then it could be a case of abandonment of the employment. If the cases of the abandonment of employment are more, then it shows the mental disengagement or disaffiliation with the company. You need to investigate why employees do that. The employment provides bread and butter to the employees. But, the sooner they get a chance of a better opportunity, they do not show any qualms about quitting, leaving the current company high and dry. There could be several reasons for them to do so. Please investigate.

The second issue of your post is the non-payment of the salary advance that they had drawn from the company. Here the pertinent question arises is whether your company has a policy on the payment of salary advance and employee loan. The former is given for the days the employee has served in that month. Since the employee is eligible to get the salary, disbursement of early payment on some genuine grounds does not matter.

However, for the disbursement of the loan, does your company take the signature of two employees as guarantors? If the employee fails to repay the instalment of the loan, then the company reserves the right to recover the balance loan amount from the guarantors. However, hereafter, you may start making a legal agreement with the employee. Ensure that even the guarantors also sign the agreement. The legal agreement will be a deterrent for the employees to play a truant.


Dinesh Divekar

From India, Bangalore
Nagarkar Vinayak L

Dear madam,

It appears you have rampant practice of giving advance against salary without proper rules in place. You can control this problem by:

1 Stopping it's rampant practice

2. Decide eligibility and conditions for its payment.

3. The quantum should be minimum but should cover days worked.

4 . Stipulate notice period for resignation any payment of salary in lieu of failing to give notice.

5. In case of defaulters , withhold relieving letter, giving service certificate . Make appropriate mention in BGV checks.


Vinayak Nagarkar
HR and Employee Relations Consultant

From India, Mumbai

The best thing is not to give advances
If that is not possible, advance given should be such as can be recovered.

Under Payment of Wages Act, advance can not exceed 3 months salary.

Other than that, normal prudence applies, Beyond that there is little you can do. This is a standard risk unfortunately

From India, Mumbai

Dear Sushmita Roi,

pls make a policy for advance will be given by the company to the employees-

1) Mention the year of services (eligible for advance taken)
2) advance will be given by as per designation (amount will be differ as per employee designation)
3) Maximum taken amount of advance
4) Return amount, make terms and conditions including if he resign immediate basis, notice period or continues services

With Regards,
Divya V

From India, Noida
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