recovery from salary

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

18 March 2010 In one company, generally employees quit without notice after five or six months after learning work for better salary at other places. Can the company put a rule that one must work for min of 1 yr and Can the company hold some part of salary every month as holding amount and pay back preferebly with bank interest on the holding amount when the employee quits after he works for more than one year. If it is valid, what is the name to be given for holding that part of salary. Kindly guide

Rasesh

Rasesh (Expert)
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18 March 2010 The intention of the query is clear: retention of the employee behind whom efforts have been spent by the company in training and development. If a clause is put in the CTC structure as suggested above, then candidates would not prefer to join the organisation and will also bring ill-repute to the organisation.

A better way would be to structure the CTC in a manner in around 15-20% of the CTC is kept as a loyalty bonus / committment Bonus and would be payable to employees who complete one year of service and depending on his performance at the end of the year which would be evaluated by the senior. In case the performance is satisfactory, 100% of the amount would be paid. If the performance is superior, then 125-150% of the loyalty bonus as stated in the CTC would be given and if the performance is below par, then 75% would be given.

CMA Arif Farooqui

CMA Arif Farooqui (Expert)
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19 March 2010 OTHER WAY IS...
BOND FILLED BY EMPLOYEES... AS NOWADAYS IT IS FILLED IN CASE U R GOING TO EMPLOYEE IN A PSU

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M Prabhakar Menon

M Prabhakar Menon (Expert)
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19 March 2010 There is a limit upto which an employer can deduct certain amounts from salary/wages This is not the proper way to go about it.Like all business decisions there is an element of risk involved.Attrition is a common feature in all industries except in PSUs and Govt jobs even though the take home pay is less than Pvt sector's why? The solution to the malaise lie with the employers themselves. Many cos had a system of bonds which they enforce when an employee quits until this practice was struck down by the Supreme Court It is therefore essential to build up systems and practices with proper checks and balances such that the action of any single or group of individuals cannot disturb the operations by their acts of commission or omission