Is It Legally Required to Get Explicit Acceptance for Annual Increment Letters?

Dear all,

I am working as an Assistant HR Manager in a public limited company. Can anybody tell me if it is a statutory requirement to mention in the annual increment letter that the employee must accept it by including a sentence like 'I have read, understood, and agree to abide by the aforementioned terms and conditions of employment,' or if a simple clause requesting acceptance is sufficient. I am seeking clarification on whether it is mandatory by law to have the employee explicitly accept the increment letter or if their acceptance can be implied.

Please help.

Regards,
Geeta

Hello Geeta,

Increment letters are always given after the appraisal is approved by the MD/CEO, and the approved copy is sent to the Finance department. You should state that your salary has been revised effective from the date, usually the first day of the financial year. There is no need to take acknowledgment from employees; simply place one copy in their personal files, and the other should be submitted to Finance. Always hand over the letters to the heads of departments. Feel free to ask if you require further assistance.

Regards,
Imran Wilson

Hi Imran,

If an employee refuses to accept the increment letter because they are not convinced with the salary increase, is it compulsory to have it signed by the employee before increasing their salary? Please advise.

Regards,
Geeta

Geeta,

If an employee is not willing to accept an increment, then it's not your problem unless he/she formally accepts the clause/letter (duly signed with). He/she won't be entitled to the revised pay scale. However, everyone is working for money :)

You can formally announce via email; after that, your part is over, and the ball is in a different court. You can justify to management that you have completed all formalities and this is a formal email regarding this, but I have not received any inputs from the employee.

Hope I have answered your question... Thanks.

Regards,
Deepak

Thank you very much.

But just one last question, is it not statutory, i.e., mandatory by law, to include a clause such as 'please accept the copy as a token of acceptance'?

Geeta

It is advisable to have an acknowledgment of every correspondence, including increment letters given to an employee, and have it filed in the personal file. This helps us for any future reference and also comes in handy in the event of any disputes.

With regards to the wordings, you may wish to add, "All other terms and conditions of your employment remain unchanged." This line will help you safeguard your interest.

Regards, Vidyashankar

Hi Geeta,

It is a general practice that acknowledgment of an employee is not obtained on the annual increment letter unless there is a change in other terms and conditions of employment. The reason for not obtaining the acknowledgment is that when an employee receives the revised salary, the same is considered as 'acknowledgment'. If an employee refuses to receive the increased salary due to dissatisfaction with the increment, he/she is required to bring the matter to the appropriate authority for addressing the grievance.

It won't be necessary because a simple signature of the employee shows his acceptance of the letter, and the same can be kept as proof of acceptance of the letter.

Ashok

It is not mandatory to get acknowledgment for appraisal/annual increment because in the offer of employment letter itself we might have given the following wordings:

"You have been offered in __________(CADRE/DESIGNATION) and your basic salary is fixed at Rs._______ per month. You will receive all other allowances as per the eligibility to your cadre. Please note that the annual increment/appraisal is not on an automatic basis and it will be fixed every year by the management according to your performance. Furthermore, please note that the salary and perquisites payable to you are strictly confidential and should not be disclosed to any other persons. Hence, he is not supposed to disclose his increment salary or other perquisite details to others, lest he will have to face administrative/disciplinary action.

All the best,
With warm regards,
S. Bhaskar"

There is no statutory obligation that compels you to state, "I have read, understood, and agree to abide by the aforesaid terms and conditions of employment."

However, there is no legal binding that requires you to have the letter accepted by the employee. Nevertheless, it is necessary to get a copy of the letter signed as a token of receipt and acceptance of the same.

The standard Increment Letter should include the following paragraphs:

1. All other terms and conditions of your appointment shall, however, remain unchanged.
2. Please sign the duplicate copy of this letter as a token of your receipt and acceptance of the same.

The signed duplicate copy of the letter should be preserved in the employees' personal files.

Cheers!!!

Vasant Nair
HR Advisor

Pls help.

Regards,
Geeta

Hello Geetha,

Accepting increment letters is not mandatory, but when a person accepts the salary with the increased amount, this implies acceptance.

In view of the increased salary, the individual may be subjected to taxes and other deductions; hence, acceptance is typically required.

Therefore, the responsibility lies more with the employee.

Usually, the increment is granted post-appraisal as per the recommendations, ensuring all aspects are taken care of.

Non-acceptance of increment letters may stem from reasons such as dissatisfaction with the increment, comparison with colleagues, or dissatisfaction with the amount. All these factors need to be considered before granting increments.

Nagaraj
Email: nagaraj1946@gmail.com

It is not mandatory to take a signature stating, "I have read, understood, and agree to abide by the aforementioned terms and conditions of employment."

It is sufficient to obtain a signature confirming the delivery of the letter. If an employee has any grievances, they are responsible for addressing them independently.

If you insist on acceptance, the employee may refuse if they have grievances, leading management to undertake various administrative actions to secure acceptance of the new salary package. Additionally, the release of increments depends on factors such as employee performance and business conditions. Management holds authority in issuing orders rather than negotiating. Employees must accept what is provided, and if they have grievances, they should raise them following the prescribed procedure to seek resolution.

Bye,

AG Desai

I hope that the company would have a policy where employees are appraised periodically and suitably honored (remunerated). This, in itself, speaks for and no separate acknowledgment is necessary as the employee is governed by policy and practices in the company. If he is unhappy and rejects, you can just inform them that as per policy, their compensation has been revised.

Accepting / Acknowledging Letters

HR Community is in habit of taking acknowledgement from employees on each and every letter / paper they issue to employees. Most of the time entire HR Department follows this practice blindly, without verifying the purpose or need of taking acknowledgements.

• Only communications having significant consequences needs to be acknowledged by the employees.

• I feel, only the certain kind of communication, if employee claims in future he never received and can possibly put employer in a difficult spot needs to be acknowledged.

• Some communications are very important and significant but there is no need to get them acknowledged every time. For example: A worker is promoted as a Supervisor and a letter is issued but acknowledgement by the concerned employee is not in records. In this case incase worker claims that he is not aware of the fact that, he is no more a worker and is promoted as a Supervisor, there are many other ways to prove it otherwise. Like change in the designation in HRMS; Payroll; Pay-Slip, Change in nature of his work, Change in reporting, Change in salary … etc.

• It also needs to be noted here that, in case an employee refuses to accept and acknowledge the communication by employer, he can be charged with indiscipline and insubordination.

• There is no need to get acknowledged Annual Increment Letters from thousands of employees every year. It is a sheer waste of time and resources.

Thanks & Regards

Dear Geeta,

It is not mandatory to have the increment letter acknowledged by the employee. In case the employee refuses to accept the letter, he/she should provide a written explanation for doing so. Therefore, there is no need to worry about this matter and just stay calm.

Regards,
Kalyani

Hi,

As you all are aware that advance against salary is taxable, it will be treated as “Perquisite”.

Please find attached Loan Perquisite calculation sheet for your reference.

Regards,

Jagdish Pathak
# 9811488664

Hello sir,

I agree with you. But if an employee is not happy with his increment and refuses to accept it, but the employer has already transferred the salary and arrear amount into his salary account, then what can he do?

Regards,
Sandeep

"There is no statutory obligation that compels you to state... 'I have read, understood and agree to abide by the aforesaid terms and conditions of employment.' There is no legal binding that you should get the letter accepted by the employee. However, it is necessary to get a copy of the letter signed in token of receipt and acceptance of the same. The standard Increment Letter should include the following paragraphs: 1. All other terms and conditions of your appointment shall, however, remain unchanged. 2. Please sign the duplicate copy of this letter in token of your receipt and acceptance of the same. The signed duplicate copy of the letter should be preserved in the employees' personal files. Cheers!!!

Vasant Nair
HR Advisor

Pls help.

Regards,
Geeta