Notice Period Deductions: Can I Switch from Basic to Gross Salary Without Legal Issues?

Dear Seniors,

My company follows a policy of serving a two-month notice period or providing wages for two months. However, we currently deduct from the basic salary rather than the gross salary. I am considering changing this practice to deduct from the gross salary instead. Would any laws or norms restrict me from making this adjustment? Please provide guidance.

Thank you.

Dear,

According to me, the notice period should be the same for both sides (Employee & Employer). On the other hand, it's good if you deduct the notice period from gross because if any employee works during the notice period, he/she will get a salary based on gross, not on basic.

You should follow the formula mentioned below for the notice period (Both Sides):
Monthly Gross Salary * 12 / 365 * days of notice period = Notice Period Amount

Deduction of salary if the employee doesn't provide a notice period is possible. However, it should be part of the organization's policy in the first place, approved by authorized personnel. You may deduct the gross salary if this clause is mentioned in the appointment letter to the employee, as that will have their consent before joining the organization to accept or reject. Anything that is not accepted by the employee during their tenure in the organization may lead to a legal battle. I suggest that if this clause is not mentioned in the appointment letter, you should immediately roll out an interim process and obtain sign-off from all employees. For all future recruitment, you should make it a standard clause. Ensure that the revised policy/process change is formally approved by the designated authority of the organization.

Please let me know if you need further assistance.

Thank you.