Experience Letters and Offer Dates: How to Handle Pre-Registration Employment in India?

We have been running an IT company in India since February 2016 and, after finally gathering the financial strength, registered the company on the 24th of May 2017. However, we have had two people working for us since February 2016.

Eligibility for Experience Letter

What I would like to ask is, are they eligible for an experience letter since the time of company registration or since the time they started working?

Offer Letter Date of Joining

If we were to give them an offer letter after the company registration, what date would the offer letter mention as the date of joining?

Please advise. Thanks.

Hi Friend,

I hope you have obtained the shop and establishment registration certificate for your company. Under this act, you need to issue appointment letters to all your employees. Your employees are eligible to receive experience letters from February 2016, as they have worked since that time.

Feel free to call or reply for any assistance.

Thank you!

Thank you, Praveen, for answering my query. Yes, we completed all registration formalities. So, as you advised, we will issue experience letters to them from February 2016.

Experience Letter Format

Is there anything special to mention about my company registration in their experience letter, or will any normal format available in this forum work? However, I think it's not necessary, but their concern is that the only proof any future employer will see is the registration date of our company, and they may face problems by showing experience before the registration period. But I think they are unnecessarily worrying. As they have been associated with us from the beginning, and we have a good relationship now, I don't want them to face any type of problem in the future.

So please clarify if there is a chance of any problem they may have in future employment. Thank you.

When you are ready to testify the experience prior to the registration of the unit, there would be no issue in accepting it by any new employer. Normally, the employers won't bother about the registration date of an employer, as it is very much understandable that there has to be a lot of spadework involved before the unit is registered. Indeed, such experience is counted and valued as greenfield experience is really worth as you work with a lot of uncertainties.

The Importance of Business Registration and Employee Service Certificates

In my personal opinion, the registration of any business venture under any law is similar to the issuance of a birth certificate to a newborn baby. The formation of the enterprise is antecedent to the registration process. Even a proprietorship concern can be converted into a partnership or a private limited company at any point in its lifecycle.

Therefore, what is important in the issuance of a service certificate to an employee is the exact date on which they started their service with the establishment, whether before or after its registration under the applicable law.