How to Handle Revised Salary Contributions for Ex-Employees After They've Left?

Handling Revised Salary Contributions for Former Employees

If an employee worked with us and left the company, their final settlement is completed, and they have received their PF claim. If a salary revision is done after the settlement of PF and Full and Final Settlement, how should we deposit the revised salary statutory contributions considering that the employee has already left?

The employee has left. He has received his full and final settlement. He even received his PF. That means probably 6 months have passed since he left. So how can you increase his salary now?

@Melway Services, I assume this. Please correct me if I am wrong.

An employee resigned from your organization 5 months ago. His full and final settlement was completed, including the PF claim. Now, your organization has announced a salary revision for all employees with retrospective effect (for example, from 1st Jan).

Assuming the employee resigned in March 2014, do you want to know how the calculation works for these 3 months (January to March 2014)? Am I correct?

Melway Services,

Your question is not clear. If Mr. Shivaramakrishna's assumption is correct, then yes, he is entitled to receive the revision of his salary retrospectively from the date of applicability till the date of his relieving. Now, your query is for the disbursement and payment of his revised salary. The employee might have left, but you must have his personal details. Send a letter advising him to come and collect his balance salary. If not, ask him how and where it should be sent. You can send it by Demand Draft, less commission, to his address. Even if he withdraws the Provident Fund, you have to deposit his and the employer's contributions to his PF account as supplementary.

I have encountered such examples during my tenure of service where charters of demands are finalized under the Industrial Disputes Act, 1947 after prolonged negotiations, sometimes even lasting 2 years, and applicable from the date of the revision of salary retrospectively, not prospectively, regardless of whether the employee is still on the roll, resigned, or superannuated. Resignations, superannuation, retirement, and deaths do not wait for any settlement. We are bound to implement the settlement after signing.

I hope you are clear on the matter.

Regards,
Adoni Suguresh

Sr. Executive (Pers, Admin, and Ind. Rels) Rtd
Labour Laws Consultant