In our company, one employee needs to transfer to our USA parent company on an L1 visa, and the USA company will pay his salary. The transfer is based on re-joining after a 2-year period following his work completion in the USA. Please suggest if we need to allocate benefits under gratuity, the superannuation scheme, and other benefits as per the law.
From India, Pune
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From India, Pune
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Even though the U.S. company is 'the parent company' and its Indian counterpart is a 'subsidiary company,' or under whatever classification it falls, both are distinct and separate entities for all practical purposes, including personnel matters, and are only bound by the laws of their respective countries.
As per the law relating to gratuity in India, as long as the employee is on the rolls of the company, his services with the company, notwithstanding any occasional and temporary break necessitated by the employer like the one you mentioned, continue. Simply put, this kind of temporary lending of the services of employees between the two companies is 'deputation,' which retains the lien of the deputed employee with the deputing company.
Therefore, it is for your U.S. parent and Indian counterpart to have specific clauses relating to proportionate contributions to terminal benefits for the entire period of deputation in the agreement between the companies. Else, in case of termination of employment due to the reasons mentioned in the Payment of Gratuity Act, 1972, during the course of deputation abroad or afterwards, you will be responsible to pay gratuity.
So, my suggestion is to have an allocation for annual contribution for usual terminal benefits and get it reimbursed from the U.S. company on a pro-rata basis for the entire period of deputation. My above response is not with reference to the U.S. Visa regulations about which I have no knowledge. Hence, it is better to have the opinion of an Employment Consultant.
From India, Salem
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6108As per the law relating to gratuity in India, as long as the employee is on the rolls of the company, his services with the company, notwithstanding any occasional and temporary break necessitated by the employer like the one you mentioned, continue. Simply put, this kind of temporary lending of the services of employees between the two companies is 'deputation,' which retains the lien of the deputed employee with the deputing company.
Therefore, it is for your U.S. parent and Indian counterpart to have specific clauses relating to proportionate contributions to terminal benefits for the entire period of deputation in the agreement between the companies. Else, in case of termination of employment due to the reasons mentioned in the Payment of Gratuity Act, 1972, during the course of deputation abroad or afterwards, you will be responsible to pay gratuity.
So, my suggestion is to have an allocation for annual contribution for usual terminal benefits and get it reimbursed from the U.S. company on a pro-rata basis for the entire period of deputation. My above response is not with reference to the U.S. Visa regulations about which I have no knowledge. Hence, it is better to have the opinion of an Employment Consultant.
From India, Salem
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The deployment of an Indian/India-based employee to the US parent company will be deemed a deputation, keeping the employment in the India-based company (where he was originally appointed) intact unless he is required to resign and join the foreign assignment with the parent company. In such a case, the employee shall continue to be governed by the terms and conditions regarding his PF, gratuity, etc., as per his appointment in the India-based company.
Regards,
S.K. Johri
From India, Delhi
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Regards,
S.K. Johri
From India, Delhi
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I fully agree with the views expressed by Shri Umakanthan Ji and Shri Johri Ji. Please let the concerned employee proceed to the USA company on deputation and retain his lien with your company intact until the employee's repatriation back home. Terms of his gratuity and other benefits may be negotiated with the US company for two years, and the employee should receive these benefits only upon the normal termination of his services in due course in India.
Regards,
From India, Pune
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Regards,
From India, Pune
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