Payment Of Notice Period Salary To New Joiner

We are in the process of appointing an employee, since the new joiner has to give three months notice to his previous employer, we have agreed to compensate the new joiner with notice period and gratuity.
I need to know how do we pay that amount to him i.e. covering letter stating the purpose of payment and how to account this transaction whether as signing amount or compensation towards notice period.
Should we ask for proof of recovery / non payment by last employer?
Kindly revert.

Hi, What document has to submit to the new employer to get the compensate for notice period salary of employ.
regards
-veeru

Dear KK,
It is not practically possible to account an amount paid on account of an employee who is yet to join. Any payment should be made against a valid "consideration", say, salary is a consideration (some thing in return) for work done. But an amount paid to an employee's (rather a future employee) employer is an amount standing without any valid consideration. Obviously,if your company policy permits you can pay X or Y an advance which can be written off once he joins. Since the practice is rare, a solution to this is also very remote, I presume.
Regarding proof of payment of amount by the employee to his previous employer, we can ask the employee to furnish the receipt for money paid but we can not ask another employer with whom we have no relationship to produce a certificate or document saying that he has received notice pay or not paid gratuity. Even otherwise, this will not absolve his liability to pay gratuity under the Payment of Gratuity Act.
Regards,
Madhu.T.K

Dear Mr. Kapoor,
The steps for payment towards notice period buy- out / re-imbursement should be intiated once the candidate is in place or more specifically he joins the organisation.
This payment should be made under head Notice Period Buy- out/ Notice Period Reimbursement.
It will be better , if this payment is made to the new joinee along with his first month salary or through salary latter on.
It is to be taken into consideration that, this is going to be a taxable income , if he/she is falling in taxable income bracket.
Documentation :
1. Full & Final Settlement Work-sheet
2. A copy of Cheque received/ issued to the the company or any receipt/Payment vocher issued by the company illustrating recovery from the ex-employee.