How to Handle Salary Adjustments When Changing Attendance Cut-Off Dates from 1-31 to 26-25?

Dear Team,

I need some clarification on changing the attendance cut-off date from 1-30/31 to 26-25.

Example scenario

Assume an employee joins on 1st March. As per the existing attendance cut-off date of 1st-31st, you have paid 31 days' salary on the 1st of April. Now, you are changing the attendance cut-off date to 26th-25th.

Options for salary payment

So, for the month of April, you have two options:

1. You have to pay again for 5 days' salary, which was already paid last month, if we are considering from March 26th to April 25th.

Or

2. You can pay 25 days' salary from April 1st to 25th for the first month alone. From the next month onwards, it will be paid for 30 days considering the 26th to the 25th.

Holding or salary retention is not applicable as per the wages act.

Kindly suggest some other ideas to implement this change in attendance cut-off dates. Please do support.

Alternative Attendance Calculation Method

While shifting over to the 26th/25th attendance month, an alternative is suggested: taking actual attendance up to the 25th of the current month and presuming the employee to be present for the remaining days of the month unless one is on sanctioned leave or continued absence. In the latter cases, the employee is presumed to continue to be so until the end of the month, and the pay for the month is regulated accordingly. Depending on the actual attendance from the 26th of the previous month to the 25th of the current month, the salary is calculated for the current month. Thus, any deduction on account of the previous month's non-attendance between the 26th to 30/31st of the current month is carried out in the current month. In this way, salary calculation, etc., goes smoothly, and attendance also gets regulated.

I agree with KK's suggestion. Please note that in India, the labor regulations provide that you must pay salary for the calendar month. Therefore, paying salary up to the 25th of a month is illegal and can get you into trouble in case of a complaint. You can work on the assumption that the person is present for the rest of the month and adjust the same in the next month if the person is absent.

You cannot change the wage period without notifying the appropriate authority.

Maintaining the muster roll

How do you maintain the muster roll, which is from the 1st to the 30th or 31st of the month? The period from the 26th to the 30th or 31st shall remain blank. How do you pay for NH for Republic Day, which needs to be paid in the wage period of January but in your case, it would come in February wages?

New attendance system

As per your new attendance system, the payment date would be from the 26th to the 1st/2nd day of the next month, as the case may be. Now, you decide how to move.