If I want to keep one employee on stipend and then transition to the proper payroll after 6 months, can I do that? For example, if an employee is appointed with a CTC of 15,000 and a take-home salary of 13,000, can we pay only 11,000 for the initial 6 months and then make up the difference in the following months? Is this arrangement feasible? I would appreciate your suggestions and guidance on this matter.
From India, Thane
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1From India, Thane
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Legal Implications of Employment Contracts
Such an act would not only be a breach of the contract of employment but also an unauthorized or illegal deduction prohibited under the Payment of Wages Act, 1936, which may entail a levy of a fine amounting to 10 times the amount so illegally deducted.
Understanding Employment Terms
Every term relating to employment in an industry has its own specific legal meaning; avoid unnecessary manipulative use of the terms in the interest of the employer.
Probation vs. Apprenticeship
If you want to assess the suitability of a newly recruited employee for his job and your organization, place him as a probationer for some time but do not reduce him to the status of an apprentice who is paid what is called a "stipend."
From India, Salem
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Such an act would not only be a breach of the contract of employment but also an unauthorized or illegal deduction prohibited under the Payment of Wages Act, 1936, which may entail a levy of a fine amounting to 10 times the amount so illegally deducted.
Understanding Employment Terms
Every term relating to employment in an industry has its own specific legal meaning; avoid unnecessary manipulative use of the terms in the interest of the employer.
Probation vs. Apprenticeship
If you want to assess the suitability of a newly recruited employee for his job and your organization, place him as a probationer for some time but do not reduce him to the status of an apprentice who is paid what is called a "stipend."
From India, Salem
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SELF-CERTIFICAT E PROFORMA FOR I.T. (HARDWARE) UNITS UNDER THE PAYMENT OF WAGES ACT, 1936.doc