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Our Industries want to help our contract employees by giving loan in case of medical emergency and Housing loan but the recovery of the loan is the issue. If any contract employee left before completing loan amount then how can we recover the remaining amount form contract employee . Anyone have any legal draft / documents on that basis we can recover from him or from his guarantor.

Can anyone provide the said draft or documents ?

From India, Mumbai


First of all for sanctioning of Company loan for Medical emergency/ Housing loan formulate some criteria like should have worked minimum this much period etc. Also set ceiling for loan based on the salary of the employee.

Finally execute the loan agreement in stamp paper. Stamp papers are mandatory for money borrowing agreements as whatever documents that are used for legal purposes it is compulsory to get it executed on a stamp paper because it becomes valid after that. You can also collect Post dated cheques as guarantee which can be mentioned in the stamp paper.

But in spite of the above arrangements some cases use to abscond without making the payment and legal process will be time consuming. Hence make loan release process more stringent.

From India, Madras

Require a little more clarification about "contract employees".

Whether are they working under a contractor,
or, whether company (principal employer) hired them directly under fixed term contract, whose wages/salary payment etc are directly managed by the Company (Principal employer).

From India, Aizawl

Unrecovered amount can be adjusted from the payment(salary & wages)that remains outstanding with employer, as well from the amount of full & final(earned leave+bonus+ etc). The employer should have the Register of advance intact or advance paid vouchers as proof of payme.
From India, Mumbai
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