How to Handle Payslip Issuance for an Onsite Employee in a Small IT Company?

Hi all,

I need your help again. I am working in a small IT company in Chennai with less than 30 employees. We have PF, ESI, and PT deductions. One of the employees is working at a client's place in Chennai who is paying his salary without any deductions. Now, the employee needs a payslip. Who should issue the payslip? The client is also a small company, and I handle their HR activities. Kindly advise on how to help my employee with the payslip.

Dear,

Then make his salary slip as salary paid to that employee. If basic is greater than Rs. 15,000/-, then fill form 11 for exempted employees. If gross salary is greater than Rs. 15,000/-, then he is out of coverage of ESI. However, the notification for ESI is Rs. 21,000/- w.e.f. Jan 2017 and EPF Rs. 25,000/-.

Hi,

Thanks for the support. He will not come under ESI. But we were paying his PF and stopped when he started working for the client. My confusion is, with whose letterhead should I give the payslip? With my company's or the client's? And guide me for PF too.

Dear Friend,

The letterhead should be of the client, not from your side, and the signing authority should also be them. You are not eligible for signing; otherwise, they will be treated as your employees.

Regards,
HR Alphonse
9443625359

If that employee is on the payroll of your company, you must provide a salary slip on your company letterhead (meaning company address, logo, etc.) on a simple A4 paper with an authorized signature, seal, or stamp of the company.

We didn't pay PF and salary from the company account, and the client paid the salary to his salary account. The client has to provide the payslip with their logo and authorized signature.

Thank you so much for the input.

Legally, he is an employee of the mother company and was deputed to a client company for a particular job. He is still an employee of the mother company, so technically, the employer-employee relationship remains between the mother company and the employee.

The client company may not want to issue any salary slip since they would not want to take the burden on their shoulders.

Dear Friends,

What Retesh said is absolutely correct. You have deputed the employee, and you become a contractor for your client. Here, your client is the primary employer, and you are the contractor. Your client should not pay him directly. Anything he wants to pay him (salary/bonus/reimbursement/etc.) should go through you only. You are liable to process his payroll, remit all the statutory payments, and issue payslips.

Regards,
James

Dear James,

Thank you for the clarity. In this case, the client has already transferred 4 months' salary directly and is continuing to do so. How can I (Mother company) issue a payslip from my end without transferring the salary? The employee has requested a payslip to apply for a personal loan from his salary account.

If the client has enrolled the employee under their payroll and is paying directly, then it is deemed that he has left service from your establishment and joined that company.

If the client is paying him as per your instructions, then you must have been submitting invoices over the amount paid to the employee. In that case, the attendance and payment are your responsibility, and you have to pay his EPF/PT/ESI.

Check the details, and then proceed on.