Dear Team, As my company is providing finance to buy a laptop and employees should pay the amount in instalments. So, I require your help to form a policy. Thanks
From India, Hyderabad
Acknowledge(0)
Amend(0)
From India, Hyderabad
Acknowledge(0)Amend(0)
Dear Amrutha,
Since you are making the initial payment to the distributor of the laptop and then recovering the amount, I recommend you treat the payment to the distributor as a loan to the employee. Therefore, handle the case as per the policy on loans.
Anyway, include the following points in the agreement:
a) Mode of recovery of the payment, apportionment of capital and interest per installment, etc.
b) Who will be the guarantors and their role in case of the employee's abandonment of employment.
c) Method of recovery of the dues in case of separation from the company before payment of all the installments.
d) Method of recovery of the dues in case of the death of the employee.
Thanks,
Dinesh Divekar
From India, Bangalore
Acknowledge(0)Amend(0)
8036Since you are making the initial payment to the distributor of the laptop and then recovering the amount, I recommend you treat the payment to the distributor as a loan to the employee. Therefore, handle the case as per the policy on loans.
Anyway, include the following points in the agreement:
a) Mode of recovery of the payment, apportionment of capital and interest per installment, etc.
b) Who will be the guarantors and their role in case of the employee's abandonment of employment.
c) Method of recovery of the dues in case of separation from the company before payment of all the installments.
d) Method of recovery of the dues in case of the death of the employee.
Thanks,
Dinesh Divekar
From India, Bangalore
Acknowledge(0)Amend(0)
In addition to what Mr. Dineshji has stated, one more way out if the company is short of cash is to arrange for a personal loan with your banker facilitating individual loans (laptop loan). The company can sign as a co-borrower/guarantor. This loan's EMI will be recovered by the bank from their salary. Once the loan is fully repaid, the laptop will be their own. There is coverage of an insurance policy against theft and damages as well.
However, it's also equally important to safeguard the company's data carried on the laptop.
From India, Bangalore
Acknowledge(0)Amend(0)
However, it's also equally important to safeguard the company's data carried on the laptop.
From India, Bangalore
Acknowledge(0)Amend(0)
Dear Kumar S,
If the company becomes a co-borrower/guarantor, what is the liability to the employee if he/she abandons employment? I doubt there will be any liability because when the first owner fails to pay the EMI, the second owner or co-owner will have to pay. This is a little messy arrangement. Secondly, when a loan is taken from the bank or any other financial institution, obviously one has to pay interest. Then it will not be an employee welfare measure at all.
The purchase of a laptop is a personal matter of the employee. Therefore, the company must restrict its activity only to the extent of giving a loan to the employee and nothing else.
Thanks,
Dinesh Divekar
From India, Bangalore
Acknowledge(0)Amend(0)
If the company becomes a co-borrower/guarantor, what is the liability to the employee if he/she abandons employment? I doubt there will be any liability because when the first owner fails to pay the EMI, the second owner or co-owner will have to pay. This is a little messy arrangement. Secondly, when a loan is taken from the bank or any other financial institution, obviously one has to pay interest. Then it will not be an employee welfare measure at all.
The purchase of a laptop is a personal matter of the employee. Therefore, the company must restrict its activity only to the extent of giving a loan to the employee and nothing else.
Thanks,
Dinesh Divekar
From India, Bangalore
Acknowledge(0)Amend(0)
Dear Dineshji,
The bank tie-up I suggested for the following reasons (from the employer's point of view):
1) If the company faces cash flow problems to buy and provide laptops to its employees;
2) There is a tendency among some employees to either damage or lose the laptops by not taking enough care. You'll agree there is a difference between safeguarding one's own property versus others (company's) and especially when the balance of EMI is still to be discharged. Moreover, employees will be motivated to maintain it in good condition as it's going to be their own sooner or later. Furthermore, most companies write off laptops in a shorter period compared to other equipment due to its high wear and tear.
3) The interest component can always be compensated by reimbursing the employees, thus no cost to the employee.
4) Of course, a co-borrower/guarantor carries more responsibility than the borrower itself. But since the salary itself is credited by the employer through the employees' bank account, including the F & F settlement, any dues can be recovered. In the worst-case scenario, the risk to the company is more or less the same in both cases.
5) I don't think providing a laptop facility nowadays is a welfare measure at all. It has become part of their essential job appliances like stationery, calculators, desktops, etc., especially in the 'work from home' regime/circumstances.
I don't advocate fully via a bank loan route but in the above circumstances, it's preferable.
From India, Bangalore
Acknowledge(0)Amend(0)
The bank tie-up I suggested for the following reasons (from the employer's point of view):
1) If the company faces cash flow problems to buy and provide laptops to its employees;
2) There is a tendency among some employees to either damage or lose the laptops by not taking enough care. You'll agree there is a difference between safeguarding one's own property versus others (company's) and especially when the balance of EMI is still to be discharged. Moreover, employees will be motivated to maintain it in good condition as it's going to be their own sooner or later. Furthermore, most companies write off laptops in a shorter period compared to other equipment due to its high wear and tear.
3) The interest component can always be compensated by reimbursing the employees, thus no cost to the employee.
4) Of course, a co-borrower/guarantor carries more responsibility than the borrower itself. But since the salary itself is credited by the employer through the employees' bank account, including the F & F settlement, any dues can be recovered. In the worst-case scenario, the risk to the company is more or less the same in both cases.
5) I don't think providing a laptop facility nowadays is a welfare measure at all. It has become part of their essential job appliances like stationery, calculators, desktops, etc., especially in the 'work from home' regime/circumstances.
I don't advocate fully via a bank loan route but in the above circumstances, it's preferable.
From India, Bangalore
Acknowledge(0)Amend(0)Join Our Community and get connected with the right people who can help. Our AI-powered platform provides real-time fact-checking, peer-reviewed insights, and a vast historical knowledge base to support your search.
Employee reference policy.doc