How Did HR Systems Miss a Double Salary Error for 16 Months and What Can Be Done?

Dear HR Gurus,

Please give your valuable input on the below-mentioned case:

A few months ago, a case came to light wherein an employee had been paid double salary for 16 months. An inquiry was conducted and the following emerged:

(a) The employee Kamal K was transferred from the Corporate Office to the Factory.

(b) The HR Manager at the Factory, instead of taking the employee on the Factory payroll as a transferred employee, enrolled the employee a second time, even generating a second employee ID. Consequently, the employee had two employee IDs and received two salaries.

(c) The Company has an automated payroll system, and duplicate data in other fields should normally have thrown up an error. However, the employee, in his new enrollment, Kamal K, gave his name as Kamal Kishor and provided his driving license as proof. Also, he provided a new bank account.

(d) Kamal K was also incorrectly given attendance by Corporate HR. Kamal used to periodically proceed on temporary duty to factories, so Corporate HR continued to give him attendance when he was physically not present.

Question

Why did the HR systems fail to detect this anomaly for 16 months? What corrective measures should Corporate HR institute to prevent such errors in the future?

Was PAN or Aadhar number not asked? Did your company have a digital attendance system? Obviously, the basic checks and balances had failed. Your company should examine the whole case thoroughly to get to the root of the problem.

Secondly, the employee needs to be issued a show cause notice for drawing double pay. The offense is serious as he was knowingly drawing double pay. The HR department and people in Corporate HQ need to be made accountable for the loss of revenue and double payment.

This is purely the HR department's fault as it has not been verified correctly through a proper channel like transfer/deputation, etc. As mentioned earlier, please link your payroll to ADHAAR or PAN, which is compulsory or mandatory so that errors would not occur in the future. What happened has happened. Please call the employee and inquire thoroughly, along with comparing bank salary credit statements. If the employee accepts their mistake, ask them to reimburse the loss amount to the company. If not, issue a show cause notice for further domestic inquiry as a legal measure.

Regards,
Anil Kumar KT
Manager HR & IR

Hi,

When there is an internal transfer from the corporate office to the factory, a transfer order to that effect should have been issued with copies sent to all concerned parties, including Corporate Accounts, Factory Accounts, and the Factory HR Head. This could have avoided this major issue; it's purely a lapse in the process. On the other hand, how did the factory manager create a new employee ID without proper background checks? A thorough inquiry may shed light on any potential conspiracy to gain monetary benefits.

Thank you.

Employee Number and Identity

Every company issues an employee number, which serves as the employee's identity for payroll purposes. An employee cannot be issued two different employee numbers unless a new joiner with the same name and title emerges. In cases where two employees share the same name, the company appends the employee's father's name after the employee's name for clarity.

Transfer and Employee Number Consistency

When an employee is transferred from a Plant to the Head Office (HO), their employee number (ticket number) remains unchanged, ensuring zero possibilities of double payment. Perhaps this is done intentionally and requires a thorough investigation into the matter.

In the first instance, it is the fault of the HR department at corporate in how they were handling or generating attendance when staff members were not present at their designated roles.

It is unclear why the HR department of the factory created a new ID for an employee who had transferred. The creation of a new ID implies a new employment status, potentially causing the employee to lose seniority.

How was a UAN generated for the employee's new ID, considering that the UAN is linked to Aadhar? The explanation provided does not seem satisfactory.

Lapse in Corporate and Factory HR Communication

1) This is a lapse from corporate and factory HR. There must be proper communication and correspondence flow (letter/email) mentioning the employee transfer.

Employee's Responsibility

2) Along with this, the employee (transferred) is also equally at fault. He should have clearly mentioned being an existing/transferred employee. In case factory HR is asking the employee to resubmit documents, the employee should have immediately contacted HO or his previous reporting manager. Also, why did the employee, who received double salary for 16 months, remain quiet till date and not highlight this to the factory/HO?

Factory HR's Role

3) Factory HR should have confirmed with HO about the transferred employee. Taking such measures would have easily avoided such errors.

System Limitations and Recommendations

4) The systems might not detect duplication if they are not programmed to detect any duplication for PAN, Aadhar, or bank details. I would suggest that the entire HR process for onboarding, transfers, attendance marking, payroll, org chart, etc., should be revamped. There might be chances of similar glitches that have happened and have not yet been brought to anyone's notice.