How Should We Communicate Payroll Changes to Employees: Email or Personal Approach?

Dear Seniors, we are currently processing payroll based on the number of days in each month, including Sundays. However, the company now intends to switch to a 26-day formula for salary calculation. Consequently, following this implementation, we will compute salaries based on the 'working days' in any given month.

Seeking Your Opinion on Communication Strategy

I would like to seek your opinion on the best approach to communicate this change to our employees. Would a standard email suffice, or should we individually circulate the information to all employees? Your insights based on your experience would be greatly appreciated.

Please advise on the most effective method.

Thank you for your assistance.

My suggestion is as follows:

1. Discuss with your higher officers.
2. Call all HODs and explain; take them into confidence and ask them to explain to all the employees under them.
3. If you have union employees, discuss with them.
4. Make a circular, display it on the notice board, and send all emails last.

Regards.

You have asked for the circular. However, have you checked the legality of the decision itself? You have written that "we are doing payroll as per the number of days (including Sundays) in the month respectively. Now the company wants to implement a 26-day formula for calculating salary. Thus, post-implementation, we will be processing salaries considering 'working days' as the number of days in any particular month."

Does the above statement mean you will pay your employees only for 26 days? After six days of work, the seventh day is a weekly off, and this weekly off is a paid one. You cannot deprive your employees of this paid day off. Your company must have been registered under the Factories Act or the Shops and Establishment Act. Both acts mandate payment for the weekly off as well.

Please confirm whether my understanding is correct. Other senior members may also contribute.

Ok...

Dinesh V Divekar

Dear Srihari and Dinesh,

When we say we have 26 days, we did not mean to pay only for 26 days. Of course, their Sundays will also be paid because people working the whole month will receive a full salary. If your denominator is 26, then the total working days will also be 26. Thus, employees will not lose their pay at all.

The same formula is used for converting daily wages into monthly wages under the minimum wage policy of the government or calculating gratuity and other wages for people.

Example Calculation

For example, if an employee's monthly salary is 10K and the working days are 26 in a particular month, if the employee has worked all days, the calculation will be as follows:

Salary for that month: 10000/26 * 26 = 10000

If someone has taken two days off, then their working days will be 24, and the calculation will be as follows:

Salary for that month: 10000/26 * 24.

I hope this helps you understand this. I would appreciate your feedback on this. Please provide your inputs.

Communication Strategy

What I asked was, as it is a change in policy, we need to inform everyone about this. What is the best approach for informing all employees - an individual email or circular?

Thanks!

Legal Computation of Salary Using 26 Working Days

This is the correct and legal way of computing salary using 26 working days. You simply need to issue a circular informing the employees of how the salary is being computed and clarifying that Sundays are included in the salary calculation. You may mention the relevant Supreme Court judgment or the section of the act under which this is being done.

Regards