How Do You Manage Debit Balances from Ex-Employees for Excess Leave and Notice Periods?

Managing Debit Balances of Former Employees

Debit balances of employees who have left have arisen because there was some loophole in the procedure. In the case of employees who wish to leave and submit their resignation, their records must be cross-checked for excess leave, dues to the company, and company property in their charge (such as laptops and mobiles), and compiled.

Dues from and to the employee can be calculated, and before final clearance is given, accounts can be settled. Dues from employees who abscond also need to be calculated, and the financial impact should be assessed to determine how to recover, for example, pay not drawn by the individual if they abscond in the middle of the month.

Gratuity and PF balances cannot be touched by the employer. Policies to review leave and outstanding advances should be established so that accounts are reviewed periodically.

Company guest houses need to send monthly details of outstanding dues, if any, to the main office. The primary policy should be to never allow any dues to accumulate. This will enable the organization to prevent issues like excess leave or guest house deductions.

Not serving the notice period is a contingency that cannot really be prevented. In such a case, the company should consider whether to initiate legal action for breach of contract. Alternatively, they should develop their employee engagement policy in a way that employees will not feel inclined to quit.

Regards