Please provide your clarification on the following issue:
One of our Regional Sales Managers has appointed a Personal Driver to drive his car for his fieldwork, and the driver has been paid a salary/wage by this RSM. In turn, the RSM will claim reimbursement in his second fortnightly expenses bill under the head 'business development expenses.' My question is: how can this salary paid to the Personal Driver by the Regional Sales Manager be accounted for by the Company? Alternatively, under what head of account should this Regional Sales Manager pay the salary/wages to his personal driver?
Furthermore, is there any chance for this driver to be classified as an employee under the Company's payroll if he continues to work as a Personal Driver?
From India, Bangalore
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1One of our Regional Sales Managers has appointed a Personal Driver to drive his car for his fieldwork, and the driver has been paid a salary/wage by this RSM. In turn, the RSM will claim reimbursement in his second fortnightly expenses bill under the head 'business development expenses.' My question is: how can this salary paid to the Personal Driver by the Regional Sales Manager be accounted for by the Company? Alternatively, under what head of account should this Regional Sales Manager pay the salary/wages to his personal driver?
Furthermore, is there any chance for this driver to be classified as an employee under the Company's payroll if he continues to work as a Personal Driver?
From India, Bangalore
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The Regional Sales Manager can claim reimbursement of his own personal driver's wages. This cannot be accounted for in business promotion expenses, as this is not an allowed expense nowadays. This will form a part of his perks as the Manager and is taxable.
Further engagement of a driver for a Manager's car should be personal, and no nexus between the company and the driver should be established. I had a bitter experience with one of my Managers who had engaged a driver on his own payment of monthly wages. He used to send the company car for fuel filling, and the driver used to take a photocopy of the bill in the name of the company car and keep it. Similarly, when the car was sent for servicing, he used to sign the bill/out gate pass and keep that copy as well.
One fine morning after 5 years of service, the Manager fired him for misconduct. The Driver preferred an application before the Labour officer for reinstatement with back wages, pleading that he was working directly for the company. However, his claim was subsequently dismissed with difficulty. Allow him inside the factory as a third-party driver/visitor.
From India, Madras
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Further engagement of a driver for a Manager's car should be personal, and no nexus between the company and the driver should be established. I had a bitter experience with one of my Managers who had engaged a driver on his own payment of monthly wages. He used to send the company car for fuel filling, and the driver used to take a photocopy of the bill in the name of the company car and keep it. Similarly, when the car was sent for servicing, he used to sign the bill/out gate pass and keep that copy as well.
One fine morning after 5 years of service, the Manager fired him for misconduct. The Driver preferred an application before the Labour officer for reinstatement with back wages, pleading that he was working directly for the company. However, his claim was subsequently dismissed with difficulty. Allow him inside the factory as a third-party driver/visitor.
From India, Madras
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Employee Personal Information.doc