Case of Erroneous Pay Fixation for a Government Employee
Please consider this case. A central government employee got promoted to a higher post (with a change to a higher pay band) in July 2009. His pay was fixed according to the Sixth Pay Commission. Now, after four years, he is informed in July 2013 by his office that his pay was erroneously fixed higher in July 2009, and his revised (lower) pays re-fixed each July after 2009 are communicated to him.
Questions Regarding Recovery of Excess Payment
(a) Due to the excess money paid to the employee over the last four years, the office has to make a recovery. On what basis/rates can the office recover monthly/quarterly/partially/fully amounts from the employee?
(b) In this particular case, there is no fault on the part of the employee. The moral question is why he should feel the agony of recovery (besides a reduction in pay) from his monthly salaries?
Any ideas/thoughts on the above would be helpful to understand the government procedure and guidelines in this regard.
From India, Dehra Dun
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1Please consider this case. A central government employee got promoted to a higher post (with a change to a higher pay band) in July 2009. His pay was fixed according to the Sixth Pay Commission. Now, after four years, he is informed in July 2013 by his office that his pay was erroneously fixed higher in July 2009, and his revised (lower) pays re-fixed each July after 2009 are communicated to him.
Questions Regarding Recovery of Excess Payment
(a) Due to the excess money paid to the employee over the last four years, the office has to make a recovery. On what basis/rates can the office recover monthly/quarterly/partially/fully amounts from the employee?
(b) In this particular case, there is no fault on the part of the employee. The moral question is why he should feel the agony of recovery (besides a reduction in pay) from his monthly salaries?
Any ideas/thoughts on the above would be helpful to understand the government procedure and guidelines in this regard.
From India, Dehra Dun
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And what about higher income tax paid during last 4 years due to higher fixation of pay? How that can be adjusted during the period/years of recovery?
From India, Dehra Dun
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From India, Dehra Dun
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The employer can deduct/adjust erroneous overpayments. The Payment of Wages Act 1936, section (7)(2)(f), also provides for the same as follows:
[(f) deductions for the recovery of advances of whatever nature (including advances for traveling allowance or conveyance allowance), and the interest due in respect thereof, or for the adjustment of overpayments of wages;]
However, the mode of deduction should not cause the employee to suffer, resulting in a drastic reduction in take-home pay. It should be in small installments, and any other tax liability (like Income Tax) on account of overpayment should be borne by the employer.
Regards,
Shailesh Parikh
Vadodara, Gujarat
[Phone Number Removed For Privacy Reasons]
From India, Mumbai
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[(f) deductions for the recovery of advances of whatever nature (including advances for traveling allowance or conveyance allowance), and the interest due in respect thereof, or for the adjustment of overpayments of wages;]
However, the mode of deduction should not cause the employee to suffer, resulting in a drastic reduction in take-home pay. It should be in small installments, and any other tax liability (like Income Tax) on account of overpayment should be borne by the employer.
Regards,
Shailesh Parikh
Vadodara, Gujarat
[Phone Number Removed For Privacy Reasons]
From India, Mumbai
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As a retired State servant, I agree with the view of Ravi. On promotion, normally a G.S. is granted a notional increment in his lower scale, and the new basic is fixed at the corresponding stage in the higher scale, ensuring a minimum percentage of hike. At the time of promotion, sometimes if an increment is due, people are permitted to opt to avail that and get the pay fixed after some time. Therefore, it is possible that his pay should have been fixed wrongly by mistaken interpretation of fixation rules. However, such mistakes would be detected in the audit later. Rectification is none other than revised fixation and recovery of excess payment. Hence, my answers to your queries are:
Recovery of Excess Payment
(a) Mere lapse of time is not an excuse for recovery of excess payment due to wrong pay-fixation in Govt. service. There were incidents that when pension proposals were processed by the A.G's Office prior to the retirement of some Govt. servants, such defects were noticed, and due to want of time for recovery, individuals were asked to remit the entire excess payment in lump-sum before the dates of their retirement. So, the period of recovery of excess payment is depending upon the length of service of the individual.
(b) Since it is a financial irregularity resulting in more periodical payments to the individual than what he is entitled to, revised fixation as per rules and recovery of the excess payment are logical accounting principles of rectification and as such the question of morality has no room. I am not inclined to appreciate the fact that the individual is agonized for what he is to repay is what is not due to him. It is imperative that every govt. servant should be aware of the service rules and that's why barring the basic service, all govt. servants whether they belong to Class I or other lower services, are mandated to pass the Department Tests during their period of probation itself.
Regards
From India, Salem
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Recovery of Excess Payment
(a) Mere lapse of time is not an excuse for recovery of excess payment due to wrong pay-fixation in Govt. service. There were incidents that when pension proposals were processed by the A.G's Office prior to the retirement of some Govt. servants, such defects were noticed, and due to want of time for recovery, individuals were asked to remit the entire excess payment in lump-sum before the dates of their retirement. So, the period of recovery of excess payment is depending upon the length of service of the individual.
(b) Since it is a financial irregularity resulting in more periodical payments to the individual than what he is entitled to, revised fixation as per rules and recovery of the excess payment are logical accounting principles of rectification and as such the question of morality has no room. I am not inclined to appreciate the fact that the individual is agonized for what he is to repay is what is not due to him. It is imperative that every govt. servant should be aware of the service rules and that's why barring the basic service, all govt. servants whether they belong to Class I or other lower services, are mandated to pass the Department Tests during their period of probation itself.
Regards
From India, Salem
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I fully agree with your kind response to my query. However, just to elaborate on the case, the following may also be noted:
1. The basic pay of the employee was fixed by his office on promotion to a higher post, and the corresponding Office Order was released during August 2009.
2. Subsequently, another Office Order was released in November 2009, confirming the basic pay (fixed earlier by his office) by the audit party of the concerned Ministry.
3. Now, after more than 3 years, another audit party of the same Ministry observes a discrepancy in the fixation of pay (Office Order in July 2013). Is it not surprising that there are two different opinions by the audit party of the same Ministry at two different times spanning more than 3 years?
4. One can really wonder whether the earlier fixation (August 2009 and November 2009) was correct or the current one (Office Order in July 2013) is correct?
Kind Regards.
From India, Dehra Dun
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1. The basic pay of the employee was fixed by his office on promotion to a higher post, and the corresponding Office Order was released during August 2009.
2. Subsequently, another Office Order was released in November 2009, confirming the basic pay (fixed earlier by his office) by the audit party of the concerned Ministry.
3. Now, after more than 3 years, another audit party of the same Ministry observes a discrepancy in the fixation of pay (Office Order in July 2013). Is it not surprising that there are two different opinions by the audit party of the same Ministry at two different times spanning more than 3 years?
4. One can really wonder whether the earlier fixation (August 2009 and November 2009) was correct or the current one (Office Order in July 2013) is correct?
Kind Regards.
From India, Dehra Dun
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Dear Cpk,
First, I admit that the Central Govt. Employees Service Rules are not familiar to me. However, I made an attempt based on my presumption that, as per Art. 309 of the Constitution, the service rules of employees of the Central and State governments are similar. My answers are based upon the Tamil Nadu Govt. Servants Fundamental Rules only. As you've pointed out, interpretations may differ from person to person.
Here in the State, bills are presented to the Treasury for payment. The Treasury will verify the bills as to their admissibility in terms of their maintainability and arithmetical accuracy. Apart from this, there would be annual office inspections by superiors and audits by the A.G.'s office. Thus, a system of multiple checks and balances is in place. Even then, cases like you have mentioned happen inadvertently at times. Owing to the ubiquitous red tape, the percolation of information about the latest amendments and authoritative clarifications down the level is always belated. So, there are always conflicting and contradictory interpretations. It is better to consult a person well-versed in Central Govt. Establishment matters.
Regards
From India, Salem
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First, I admit that the Central Govt. Employees Service Rules are not familiar to me. However, I made an attempt based on my presumption that, as per Art. 309 of the Constitution, the service rules of employees of the Central and State governments are similar. My answers are based upon the Tamil Nadu Govt. Servants Fundamental Rules only. As you've pointed out, interpretations may differ from person to person.
Here in the State, bills are presented to the Treasury for payment. The Treasury will verify the bills as to their admissibility in terms of their maintainability and arithmetical accuracy. Apart from this, there would be annual office inspections by superiors and audits by the A.G.'s office. Thus, a system of multiple checks and balances is in place. Even then, cases like you have mentioned happen inadvertently at times. Owing to the ubiquitous red tape, the percolation of information about the latest amendments and authoritative clarifications down the level is always belated. So, there are always conflicting and contradictory interpretations. It is better to consult a person well-versed in Central Govt. Establishment matters.
Regards
From India, Salem
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1. The excess payment made erroneously may be covered, not exceeding the monthly difference between the previous and current fixed amounts from the monthly salaries, while considering the total deductions ceiling under the Payment of Wages Act 1936.
2. Any Income Tax paid by the concerned employee on the excess payment, if applicable, should be the responsibility of the Section/Signatories accountable for making the excess payment to resolve the matter amicably.
Regards,
R K Singh
From India, Delhi
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2. Any Income Tax paid by the concerned employee on the excess payment, if applicable, should be the responsibility of the Section/Signatories accountable for making the excess payment to resolve the matter amicably.
Regards,
R K Singh
From India, Delhi
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Dear CPK,
Sorry for the delayed reply. We also wrongly calculated the HR & TA of two employees from their joining date, but this error was identified within 6-7 months of joining and subsequently recovered.
Procedures to Follow for Pay Fixation
First of all, the fixation of pay should be verified by the senior staff of the Department while fixing, and only then OOs are issued. When the first audit party confirms the pay fixation, it is an added advantage to your department.
When the second audit party raises an objection, they would first raise an informal objection that has to be clarified by the department. In this case, it is the department staff who have to justify the pay fixation, mentioning that it is as per the rules only. Since government rules are vague and differ from person to person, the department staff should have tried justifying the second audit party regarding the pay fixation and resolving the audit query. Finding such a grave mistake also reflects on the department's working. The work of department accounts and admin staff is not just to act on the audit discrepancy and recover the amount without verifying whether the pay fixation was correct or not. Please clarify whether this recovery is happening only in your case or in the case of other staff as well.
Since I am a newly joined staff and not aware of pay fixation, and there are very few central government employees in this forum, I suggested posting full query details like date of joining, initial pay, pay fixation done by your department, and pay fixation suggested by the auditor for members to provide input.
Apart from central government employees, the majority of CiteHR members are employees working in private companies who may not be aware of pay fixation rules and CCS, GFR, GAR rules, so they may not understand the issue. To get a clear solution, I suggested CPK visit a website. This was misunderstood by Executor, who thought I was promoting a website.
You may also refer to:
http://download.ssapunjab.org/sub/in...19_10_2012.pdf
http://himachal.nic.in (link fixed)
which deal with the recovery of excess paid amounts from employees.
You are not the only employee for whom excess payment was done and recovered. But in your case, it first needs to be proved whether the payment or pay fixation is really erroneous or correct. If your department staff/accounts/admin can justify and prove to the auditor that the pay fixation is correct, then there won't be any recovery at all.
Regards,
Ravi
From India, Madras
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Sorry for the delayed reply. We also wrongly calculated the HR & TA of two employees from their joining date, but this error was identified within 6-7 months of joining and subsequently recovered.
Procedures to Follow for Pay Fixation
First of all, the fixation of pay should be verified by the senior staff of the Department while fixing, and only then OOs are issued. When the first audit party confirms the pay fixation, it is an added advantage to your department.
When the second audit party raises an objection, they would first raise an informal objection that has to be clarified by the department. In this case, it is the department staff who have to justify the pay fixation, mentioning that it is as per the rules only. Since government rules are vague and differ from person to person, the department staff should have tried justifying the second audit party regarding the pay fixation and resolving the audit query. Finding such a grave mistake also reflects on the department's working. The work of department accounts and admin staff is not just to act on the audit discrepancy and recover the amount without verifying whether the pay fixation was correct or not. Please clarify whether this recovery is happening only in your case or in the case of other staff as well.
Since I am a newly joined staff and not aware of pay fixation, and there are very few central government employees in this forum, I suggested posting full query details like date of joining, initial pay, pay fixation done by your department, and pay fixation suggested by the auditor for members to provide input.
Apart from central government employees, the majority of CiteHR members are employees working in private companies who may not be aware of pay fixation rules and CCS, GFR, GAR rules, so they may not understand the issue. To get a clear solution, I suggested CPK visit a website. This was misunderstood by Executor, who thought I was promoting a website.
You may also refer to:
http://download.ssapunjab.org/sub/in...19_10_2012.pdf
http://himachal.nic.in (link fixed)
which deal with the recovery of excess paid amounts from employees.
You are not the only employee for whom excess payment was done and recovered. But in your case, it first needs to be proved whether the payment or pay fixation is really erroneous or correct. If your department staff/accounts/admin can justify and prove to the auditor that the pay fixation is correct, then there won't be any recovery at all.
Regards,
Ravi
From India, Madras
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Please advise on a case where the details of excess payment/allowances/reimbursements were identified during the processing of the Full and Final settlement of the employee. The amount to be recovered exceeds twice the total amount of the FnF payment.
Process to Recover Excess Amount
What should be the process to recover this excess amount?
Thank you.
From India
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Process to Recover Excess Amount
What should be the process to recover this excess amount?
Thank you.
From India
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Details Required for Pay Adjustment Inquiry
Please provide the following details:
- Pay Band of the employee just before promotion
- Basic Pay he was drawing in the above Pay Band
- Grade Pay
- Pay Band of the employee after promotion
- Basic Pay initially fixed and approved by the first audit party
- Grade Pay
- Month in which Promotion was given
- Basic Pay refixed by the second audit party
- Reason given for refixing the Basic Pay by the second audit party
From India, Madras
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Please provide the following details:
- Pay Band of the employee just before promotion
- Basic Pay he was drawing in the above Pay Band
- Grade Pay
- Pay Band of the employee after promotion
- Basic Pay initially fixed and approved by the first audit party
- Grade Pay
- Month in which Promotion was given
- Basic Pay refixed by the second audit party
- Reason given for refixing the Basic Pay by the second audit party
From India, Madras
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Pay Band Details Before and After Promotion
Pay Band of the employee just before promotion: 15600-39100
Basic Pay he was drawing in the above Pay band: 15000
Grade Pay: 7600
Pay Band Details After Promotion
Pay Band of the employee after promotion: 37400-67000
Basic Pay initially fixed and approved by the first audit party: 39690 (as per table on page 30 of Office Memorandum F.No.1/1/2008-IC dated 30th August 2008 from Joint Secretary to the Government of India, Ministry of Finance)
Grade Pay: 8900
Month in which Promotion was given: July 2009 (w.e.f. 2.7.2009)
Basic Pay refixed by the Second audit party: 37400 (on 2.7.2009)
Reason given for refixing the Basic pay by the second audit party: not known
From India, Dehra Dun
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Pay Band of the employee just before promotion: 15600-39100
Basic Pay he was drawing in the above Pay band: 15000
Grade Pay: 7600
Pay Band Details After Promotion
Pay Band of the employee after promotion: 37400-67000
Basic Pay initially fixed and approved by the first audit party: 39690 (as per table on page 30 of Office Memorandum F.No.1/1/2008-IC dated 30th August 2008 from Joint Secretary to the Government of India, Ministry of Finance)
Grade Pay: 8900
Month in which Promotion was given: July 2009 (w.e.f. 2.7.2009)
Basic Pay refixed by the Second audit party: 37400 (on 2.7.2009)
Reason given for refixing the Basic pay by the second audit party: not known
From India, Dehra Dun
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There remained an error in earlier message (15000 was pre-revised basic pay) Basic Pay he was drawing in the above Pay band: 27900
From India, Dehra Dun
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From India, Dehra Dun
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A little more information is required. What was his pre-revised pay scale: 16,400-450-20,000 or 12,000-375-18,000? This clarification is sought since Page No. 30 of the said notification is for the pay scale 16,400-450-20,000.
From India, Madras
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From India, Madras
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Pay Fixation Details
As per the information provided, the fixation of pay is as follows:
- Basic pay in the PB 15600-39000 on 2.7.2009: 27,900
- Grade Pay: 7,600
- Add 3% of Basic + GP i.e., 35,500 * 3% = 1,070
- Basic Pay after addition of 3%: 27,900 + 1,070 = 28,970
- Add GP of the Promoted PB 37400-67000 i.e., 8,900 to 28,970 = 37,870
Since 37,870 is higher than 37,400, the pay is fixed at 37,870 w.e.f. 2.7.2009. The next increment is on 1.7.2010.
Kindly intimate if any discrepancy is noticed. This is based on the example given in Swamy's Handbook. The new audit team may have added 27,900 + 7,600 (present GP) = 36,570, hence fixed at 37,400 in the PB of 37,400-67,000. Please check the audit observations for clearing the doubt.
Regards
From India, Madras
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As per the information provided, the fixation of pay is as follows:
- Basic pay in the PB 15600-39000 on 2.7.2009: 27,900
- Grade Pay: 7,600
- Add 3% of Basic + GP i.e., 35,500 * 3% = 1,070
- Basic Pay after addition of 3%: 27,900 + 1,070 = 28,970
- Add GP of the Promoted PB 37400-67000 i.e., 8,900 to 28,970 = 37,870
Since 37,870 is higher than 37,400, the pay is fixed at 37,870 w.e.f. 2.7.2009. The next increment is on 1.7.2010.
Kindly intimate if any discrepancy is noticed. This is based on the example given in Swamy's Handbook. The new audit team may have added 27,900 + 7,600 (present GP) = 36,570, hence fixed at 37,400 in the PB of 37,400-67,000. Please check the audit observations for clearing the doubt.
Regards
From India, Madras
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Thank you, CPK. Regarding the refixing, let me check with the rules once again. What I had mentioned is a promotion given in the same pay band with an increase in grade pay. Let me verify whether the existing grade pay or the grade of the promoted post is to be added to the basic for arriving at the new Basic Pay. If the existing grade pay is to be added, the pay fixed by the second audit team is correct. (I have not been in admin/est for the last 3 years, and hence I have to refer to Swamy's Handbook). If he was in the 12000-375-18000 range, his basic pay as of 1.7.2009 may be around 15000, not 16400. Hence, fixing at the 16400 scale as per Page No. 30, done initially, is not correct.
From India, Madras
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From India, Madras
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If you have Swamy's handbook, please refer to the examples given in that. Please check with examples what the position is in case of promotion to a higher pay band. Which grade is to be added to the existing pay or higher grade pay.
The excess salary paid is to be recovered since the fixation was not done correctly.
From India, Madras
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The excess salary paid is to be recovered since the fixation was not done correctly.
From India, Madras
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Please refer to Page No 241 (Illustration No 3) of Swamy’s Handbook 2013. It is similar to the calculations done by me. In case you need any further clarification pl come back.
From India, Madras
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From India, Madras
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Are you now sure that the pay fixation originally done was not correct as per the example given on page No. 243 as referred above? Please also share what action you have taken to recover the excess pay made.
From India, Madras
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From India, Madras
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I think that due to the agony of recovering an excess amount of salary received by the employee through the wrong fixation of salary, there is no response from the member to find a solution for other issues raised by them. I am surprised that the Officer in the Pay Band of 37,400-67,000 is not aware of the incorrect pay fixation.
From India, Madras
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From India, Madras
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