Dear Tarun,
It seems that your management is quite concerned for the employees' welfare. My friends have provided you with many suggestions from which you can choose the most suitable for your organization. However, solving the employees' problems will require more than this. You need to provide options such as:
1) Allowing them to withdraw their PF amount as a non-refundable loan.
2) Establishing an internal cooperative society.
3) Setting up a separate account in a bank where all employees can voluntarily deposit money, which can later be used by them as interest-free loans.
Currently, the existing advance policy is very harmful.
Regards,
Sandeep Kulkarni
From India, Vadodara
5It seems that your management is quite concerned for the employees' welfare. My friends have provided you with many suggestions from which you can choose the most suitable for your organization. However, solving the employees' problems will require more than this. You need to provide options such as:
1) Allowing them to withdraw their PF amount as a non-refundable loan.
2) Establishing an internal cooperative society.
3) Setting up a separate account in a bank where all employees can voluntarily deposit money, which can later be used by them as interest-free loans.
Currently, the existing advance policy is very harmful.
Regards,
Sandeep Kulkarni
From India, Vadodara
In our organization, the advance salary is given only for a few grades and that too for staff and workers. We give advance loans only when the previous advance is completely settled and after one year from the date of the advance given.
In a similar way, speak to your management and ask which grade employees are eligible, set a lower limit, and establish a time period for recovery (justified). If an urgent situation arises and the management genuinely feels the need, an extension can be granted as a special case.
You can also start charging interest if the amount is within a certain specified bracket. This may reduce the demand or requirements. Although initially, it may cause some problems or unrest, once things are settled, there should not be any further issues. After all, the policy should be considered final.
From India, Delhi
In a similar way, speak to your management and ask which grade employees are eligible, set a lower limit, and establish a time period for recovery (justified). If an urgent situation arises and the management genuinely feels the need, an extension can be granted as a special case.
You can also start charging interest if the amount is within a certain specified bracket. This may reduce the demand or requirements. Although initially, it may cause some problems or unrest, once things are settled, there should not be any further issues. After all, the policy should be considered final.
From India, Delhi
Bipin has right point.. and you have have to revise your advance salary policy.. but this reactive strategy could offend your employees.. so make changes transparently by making slow steps...
From India, Coimbatore
From India, Coimbatore
Dear All,
I am already planning to revise my current advance salary policy. However, as rightly pointed out by Mr. Jawahar, a sudden change could evoke a negative response among the employees. Additionally, our policy lacks the provision of producing documents. For example, if an employee requests an advance for marriage, they should be required to provide the marriage card. This is a detail that I am now considering incorporating into the policy.
Once again, I extend my gratitude to all seniors and friends for their valuable insights.
Thank you.
From India, Delhi
I am already planning to revise my current advance salary policy. However, as rightly pointed out by Mr. Jawahar, a sudden change could evoke a negative response among the employees. Additionally, our policy lacks the provision of producing documents. For example, if an employee requests an advance for marriage, they should be required to provide the marriage card. This is a detail that I am now considering incorporating into the policy.
Once again, I extend my gratitude to all seniors and friends for their valuable insights.
Thank you.
From India, Delhi
If the salary is 10000/=, the following conditions apply:
1. Salary advance will be given after the 10th of every month.
2. You can draw a salary advance two times, but it should be less than 70% (below 7000).
3. When you reimburse the salary, only the remaining amount will be given, for example, 3000.
From Pakistan, Karachi
1. Salary advance will be given after the 10th of every month.
2. You can draw a salary advance two times, but it should be less than 70% (below 7000).
3. When you reimburse the salary, only the remaining amount will be given, for example, 3000.
From Pakistan, Karachi
Actually you can make the policy that any employee can take only 2 or 3 time salary advance in any year. that can reduce the repeatation of employees.
From India, New Delhi
From India, New Delhi
Hi,
You can also put controls like:
1. Only for permanent full-time employees.
2. Min. association time with the organization - 6 months.
3. Approval mechanism - HR, Supervisor, and Function Head.
4. Eligibility Criteria - e.g., Medical reasons, Own Marriage, etc.
Hope it will help serve the purpose.
You can also put controls like:
1. Only for permanent full-time employees.
2. Min. association time with the organization - 6 months.
3. Approval mechanism - HR, Supervisor, and Function Head.
4. Eligibility Criteria - e.g., Medical reasons, Own Marriage, etc.
Hope it will help serve the purpose.
Dear Tarun,
Don't restrict the salary advance policy, but make some additions. For instance, salary advance can be taken up to the net salary, rounding it off to the lower value. The advance should then be deducted from the subsequent salary. Additionally, consider implementing an emergency loan policy. Under this policy, an employee can take a short-term loan, with a maximum limit of three times their salary. The repayment can be done in five equal installments, and this loan facility can be availed once a year. By implementing these changes, employees will not feel demotivated, and the burden of providing large advance amounts will be reduced.
Thanks
Don't restrict the salary advance policy, but make some additions. For instance, salary advance can be taken up to the net salary, rounding it off to the lower value. The advance should then be deducted from the subsequent salary. Additionally, consider implementing an emergency loan policy. Under this policy, an employee can take a short-term loan, with a maximum limit of three times their salary. The repayment can be done in five equal installments, and this loan facility can be availed once a year. By implementing these changes, employees will not feel demotivated, and the burden of providing large advance amounts will be reduced.
Thanks
Hi Tarun,
You can add some points to your policy:
Salary advance would be available to those employees only who have completed 6 months (or 1 year, depending on the attrition rate of the organization) of tenure. The amount would not exceed the due salary amount for the month as of the date of application.
For the help of employees, you can create a fund by deducting an amount from their salary that would be paid after completing a tenure of 3/6/9/12 months.
You can organize some training on money management, investment, savings, etc.
Try to find out the root cause that motivates them to take an advance and then go for the appropriate solution.
Regards,
VK
From India, Indore
You can add some points to your policy:
Salary advance would be available to those employees only who have completed 6 months (or 1 year, depending on the attrition rate of the organization) of tenure. The amount would not exceed the due salary amount for the month as of the date of application.
For the help of employees, you can create a fund by deducting an amount from their salary that would be paid after completing a tenure of 3/6/9/12 months.
You can organize some training on money management, investment, savings, etc.
Try to find out the root cause that motivates them to take an advance and then go for the appropriate solution.
Regards,
VK
From India, Indore
Hey Tarun,
I suggest you create a new policy named "Employee Welfare Fund." You need to deduct a fixed amount, such as Rs. 500, from each employee's salary. Once the amount is collected, it should be kept in a new account named "Employee Welfare A/c" so that you can earn interest simultaneously.
This will allow you to manage the funds easily without charging any interest in the form of a loan or advance salary. Keep in mind that the amount limit and duration of refund should be fixed, along with determining how many times an employee can take a loan in a year, such as twice or thrice.
Ensure to update this in the Appointment Letter and Salary Slips.
Cheers,
Richuka 🌀
From India, New Delhi
I suggest you create a new policy named "Employee Welfare Fund." You need to deduct a fixed amount, such as Rs. 500, from each employee's salary. Once the amount is collected, it should be kept in a new account named "Employee Welfare A/c" so that you can earn interest simultaneously.
This will allow you to manage the funds easily without charging any interest in the form of a loan or advance salary. Keep in mind that the amount limit and duration of refund should be fixed, along with determining how many times an employee can take a loan in a year, such as twice or thrice.
Ensure to update this in the Appointment Letter and Salary Slips.
Cheers,
Richuka 🌀
From India, New Delhi
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SALARY CERTIFICATE- MINISTRY OF FINANCE's Notification on formats.docx
Employee Salary file - India 2016 AB.xls