How Do I Adjust Salary for an Employee Shifting from Full-Time to Part-Time?

Hi Seniors,

I need your help. I'm working as an HR Executive in an IT company, and one of my employees is transitioning from full-time to part-time work. How should I calculate her salary now? What should we pay her?

Annual Salary: $120,000
Monthly Salary: $10,000
Full-time working hours: 8
Part-time working hours: 5
Company working days: 6 days

A quick reply regarding this matter would be highly appreciated.

Regards,
Anmol Patel

Dear Anmol,

Please elaborate on your query further. What is the nature of his employment as a part-timer? Is he working as a freelancer, and is he paid based on projects only, or is it more like a retainer? Usually, when you appoint someone as a part-timer/freelancer, you discuss the terms of pay and engagement in advance.

Regards,
Rahul

Hi,

It should have been discussed before agreeing to the part-time work by both parties. You may check if a proportionate salary would be agreeable and move forward, although it does not make much sense in the long run. For 8 hours you are paying 10k, for 5 hours it ought to be 6250.00.

Thanks and Regards.

Yes, it is Rs. 6250 for a 5-hour duty on a pro-rata basis.

R. R. Kapoor
Vadodara

All of a sudden, you cannot change an employee from full-time to part-time without fulfilling the compliance aspects. I recommend issuing a new appointment order, communicating changes in compensation, and addressing impacts on social security such as PF, ESI deductions, etc. If the person is under a contractor, ensure that the contractor fulfills all compliance aspects.

Once all formalities are completed, process the wages and remit them. In this context, let me ask you - how do you compute salary, issue payslips, and remit payments - through a spreadsheet or software?

I am sharing an interesting video on payroll automation https://www.youtube.com/watch?v=_aRA2C2IAmo.

As already pointed out, this should have been mutually discussed and agreed upon prior to the switch. Salary can now be discussed, and a fresh appointment letter can be issued. An interesting point to consider will be the applicability of Gratuity, EL, CL, and the carry forward of EL. ESI and PF will be applicable in any case.

We have a part-time employee, and we reduced his EL and CL based on the hours required to be put in. Accordingly, we made adjustments to his appointment letter.

Col. Suresh Rathi