How Should We Handle Salary Deductions for an Employee Who Resigned Without Notice?

Dear seniors,

In my company, an employee has given resignation without a one-month notice period. Therefore, we will deduct one month's salary for that notice period. My question is, which amount should I deduct?

The scenario is that in the month of June, the employee worked for 24 days out of the 26 working days. Now, should we deduct his full 26 days' Basic + DA amount or the Basic + DA amount of 24 days?

Please guide me.

Regards,
Shekhar Srivastava
Sr. Executive HR

Dear Shekhar,

Please go through the appointment letter and find out whether it is for 1/2/3 months gross or Basic + DA, or only Basic.

Find out from the Time Office for how many days the employee served your organization after you received his resignation or when he handed over the resignation letter to his HOD, i.e., the Date of Resignation letter in the latter case.

Advise the Time Office not to include his name for salary processing, and then you can calculate the total as follows:

No of days defaulted: Say 20 so 20 days Gross/Basic + DA /Basic: Rs 20,000.00

Any PL/EL Balance: Say 30 days: Rs 30,000.00

Any Advances: Say Tour Adv.: Rs 10,000.00

So in the above case, you need not pay anything/recover anything. However, get the full & final settlement signed by him, which should state that his accounts with the company have been settled as above and he does not have any outstanding against him/company.

Regards,

Exserg

Dear Shekhar,

If you want to deduct the notice period of one month, the following calculation will be helpful for you:

(Total earnings during the month) - (Total Salary for the month)

For example, if the total earning during the month is Rs. 6000 and the Total Salary for the month is Rs. 6500, then the notice period amount is (-500), which means recovery.

Regards,
Pankaj Chandan

Dear Shekhar,

In my opinion, one month's full salary should be adjusted from his full and final settlement of dues if not specifically mentioned in the appointment letter.

Regards,
R.N. Khola
Skylark Associates, Gurgaon (Haryana)
(Labour Law & Legal Consultants)
09810405361

Hi,

If the notice period is clearly mentioned in the appointment order and the same is acknowledged by the member, only then can you deduct the notice period wages. We have to deduct the full month's salary. If he worked after serving the resignation, then the working days can be adjusted, and the balance days' salary/wages can be deducted as notice pay.

Regards,
R. Palaniswamy

Dear Shekhar,

If one has not served the notice period, then in such cases, you need to deduct the notice period amount from his full and final settlement amount. For example, if X's gross salary is Rs. 10,000/- and he has worked for 24 days in his last working month, then obviously you need to make the payment for 28 days instead of 30 days. Out of this amount, you need to deduct one month's notice period amount. Generally, the basic salary is considered as the notice period amount, so please check your policy and do the final settlement accordingly.

Regards,
Amit Seth.

Dear Shekhar,

It's very simple. You have to adjust his/her one-month salary against one month's notice period. He/she already worked for 24 days in June. You have to adjust the remaining 6 days' salary (Basic + DA) from his/her other dues such as bonus, PL, etc., if any.

Best Regards,

Sajid Ansari
Delhi

You can deduct the same amount as a notice pay, which is the amount availed by the employee as a monthly pay.

Please let me know if you need any further clarification or assistance.

Dear Shekhar,

It is up to the terms and conditions agreed upon in writing in the appointment letter. Apart from this, if he was under probation, then it is not necessary to give one month's notice. I think you should not deduct any amount.

Ratan Kumar
9717438487

I am amazed to find such queries and dilemmas where there should be none.

To go deeper into the problem, I think there is something wrong with the induction training, on-the-job training, etc. of such HR executives who do not know what to do when an employee resigns and one has to recover notice pay (one, two, or three months as applicable).

It's very simple.

You assess whether it can be recovered from:

(i) his final payments (which means if the employee has sufficient earned leave/half-pay leave, etc. to his credit). In such a case, you pay him the salary for the month he worked on the date payable - as usual. Subsequently, during his Full & Final payment, you deduct the notice pay.

(ii) If you are apprehensive that the employee does not have sufficient leaves, etc. to his credit - you stop payment of the current month and put up a demand for payment of the shortfall.

(iii) Kindly don't gag and bind the employee until his relatives turn up with the notice pay amount. This practice is ILLEGAL :)

Regards.

Dear all,

Notice pay does not have any relation with the attendance of an employee. If the employee has completed his probation, as per the appointment letter, one month CTC amount is to be deducted as notice pay. If you are recovering any other dues from the employee, that will be adjusted from the entire entitlements.

Thanks,
KMP Singh

Dear friends,

I am working as an HR Manager in a beverages company, and I want to know how I can create a work review format. If anyone has one available, please tell me.

Thanks.

Hi Shekhar,

Some companies deduct the notice period from the basic and DA if applicable. The notice period typically equates to one month's salary (or as per the terms of employment). If an employee has only worked for 24 days during the notice period, you will need to adjust it against their PL if there is any balance, or you will have to recover it from the employee.

I hope this clarifies your query.

Thanks,
Uttama

Hi,

I have a practice in such cases where we try to adjust his balance compensation or PL to make it one month.

Hi Uttam,

Will you take working days for notice pay? What about weekly off? Please clarify.

Thanks,
R.K

Hi,

It will be the full-month salary, or if the management agrees, the same can be adjusted against his balance (Earned Leave).

Regards, R. Sudhakar