Dear Sirs,
I am thankful to both of my seniors for the guidance that has been provided to me. Further, I would request you to kindly guide me with my following queries:
1. If currently I issue only the offer letters and after getting registered under PF & ESI issue the appointment letters to the employees, will this be okay?
2. Can a company issue any number of offer letters without any binding?
3. Should the salary of an employee who is under the payroll of the company be above the minimum wages act of that particular state?
4. Is it compulsory that the salary should have components of Basic, HRA, Bonus, etc.? If not, then please mention the statutory components of monthly salary for an employee.
5. For the payment of bonus, are there any rules to be followed?
6. Is it mandatory for a company to disburse the salary through the bank only, or are there any other alternatives to pay the salary as well?
Regards,
Prachi Desai
From India, Kolkata
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3I am thankful to both of my seniors for the guidance that has been provided to me. Further, I would request you to kindly guide me with my following queries:
1. If currently I issue only the offer letters and after getting registered under PF & ESI issue the appointment letters to the employees, will this be okay?
2. Can a company issue any number of offer letters without any binding?
3. Should the salary of an employee who is under the payroll of the company be above the minimum wages act of that particular state?
4. Is it compulsory that the salary should have components of Basic, HRA, Bonus, etc.? If not, then please mention the statutory components of monthly salary for an employee.
5. For the payment of bonus, are there any rules to be followed?
6. Is it mandatory for a company to disburse the salary through the bank only, or are there any other alternatives to pay the salary as well?
Regards,
Prachi Desai
From India, Kolkata
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1. If you have decided to appoint someone, you need not wait until the registration for PF/ESI, which may be done in the normal course. It's better administrative norms to issue the appointment letter either just before joining or immediately after joining.
2. The number (quantum) of offer letters is limited to the vacancies available and the number of candidates selected for the respective posts. Don't make the mistake of issuing more than one offer letter per post to be filled up. The second offer can be issued only after deciding the fate of the first offer letter issued to the selected candidate. This means the second offer can be processed for a particular post only when the person offered declined to join or did not accept the post you offered, ensuring that the very first offer letter is duly canceled/invalidated properly. This is very important to avoid any confusion or litigations.
3. Any appointment cannot be made for a salary/wages less than the minimum wages notified by the state/central government.
4. You could either split the salary into basic, DA, HRA, CCA, conveyance, and other allowances or show a consolidated salary all merged into one. But to satisfy certain legal provisions, it should be split into basic and other components. This will also help you to properly streamline certain expenses, IT, PR/ESI, Bonus, gratuity, etc.
5. All Acts/Rules including Bonus are applicable and to be complied with.
6. Initially, you may disburse in cash. However, it is not appropriate to continue this practice. Crediting to the bank accounts of employees is always the best and most convenient option.
Regards,
Kumar S.
From India, Bangalore
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2. The number (quantum) of offer letters is limited to the vacancies available and the number of candidates selected for the respective posts. Don't make the mistake of issuing more than one offer letter per post to be filled up. The second offer can be issued only after deciding the fate of the first offer letter issued to the selected candidate. This means the second offer can be processed for a particular post only when the person offered declined to join or did not accept the post you offered, ensuring that the very first offer letter is duly canceled/invalidated properly. This is very important to avoid any confusion or litigations.
3. Any appointment cannot be made for a salary/wages less than the minimum wages notified by the state/central government.
4. You could either split the salary into basic, DA, HRA, CCA, conveyance, and other allowances or show a consolidated salary all merged into one. But to satisfy certain legal provisions, it should be split into basic and other components. This will also help you to properly streamline certain expenses, IT, PR/ESI, Bonus, gratuity, etc.
5. All Acts/Rules including Bonus are applicable and to be complied with.
6. Initially, you may disburse in cash. However, it is not appropriate to continue this practice. Crediting to the bank accounts of employees is always the best and most convenient option.
Regards,
Kumar S.
From India, Bangalore
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Dear Sirs,
I am thankful to both of my seniors for the guidance that has been provided to me. Further, I would request you to kindly guide me with my following queries:
1. If currently I issue only the offer letters and after getting registered under PF & ESI issue the appointment letters to the employees, will this be okay?
2. Can a company issue any number of offer letters without any binding?
3. The salary of an employee who is under the payroll of the company should be above the minimum wages act of that particular state.
4. Is it compulsory that the salary should have components of Basic, HRA, Bonus, etc.? If not, then please mention the statutory components of the monthly salary for an employee.
5. For the payment of bonus, is there any rule to be followed?
6. Is it mandatory for a company to disburse the salary through a bank only, or is there any other alternative to pay the salary as well?
Regards,
Prachi Desai
Thanks for disclosing your qualifications and experience. It helps in conveying the response appropriately. I shall briefly reiterate the recommended steps for your queries:
1. Yes; perfectly okay; in fact, it is strongly recommended.
2. Yes; subject to its manpower requirements.
3. Yes, definitely.
4. Yes, Basic, DA is a must. HRA.
5. Yes, Payment of Bonus Act. Minimum one month's salary.
6. Cash or Bank.
Hope the above helps.
Warm regards.
From India, Delhi
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I am thankful to both of my seniors for the guidance that has been provided to me. Further, I would request you to kindly guide me with my following queries:
1. If currently I issue only the offer letters and after getting registered under PF & ESI issue the appointment letters to the employees, will this be okay?
2. Can a company issue any number of offer letters without any binding?
3. The salary of an employee who is under the payroll of the company should be above the minimum wages act of that particular state.
4. Is it compulsory that the salary should have components of Basic, HRA, Bonus, etc.? If not, then please mention the statutory components of the monthly salary for an employee.
5. For the payment of bonus, is there any rule to be followed?
6. Is it mandatory for a company to disburse the salary through a bank only, or is there any other alternative to pay the salary as well?
Regards,
Prachi Desai
Thanks for disclosing your qualifications and experience. It helps in conveying the response appropriately. I shall briefly reiterate the recommended steps for your queries:
1. Yes; perfectly okay; in fact, it is strongly recommended.
2. Yes; subject to its manpower requirements.
3. Yes, definitely.
4. Yes, Basic, DA is a must. HRA.
5. Yes, Payment of Bonus Act. Minimum one month's salary.
6. Cash or Bank.
Hope the above helps.
Warm regards.
From India, Delhi
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Please see the corrected text below:
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Pls help:
1. What are the mandatory registrations for a limited company to be done, like PF, ESI, Bonus Act, etc.?
2. If the basic salary of the employees is more than Rs 6500/-, then is it mandatory to get the registration of PF?
3. Under the ESIC Act, when an employee is covered under the act, what are the obligations of the company towards the employees apart from the statutory deductions?
4. In the salary, is it compulsory to have the DA component in it? If yes, then do we need to follow the DA points/any specific rate of DA, or does it depend on the company to pay as per their convenience?
5. For a company that is selling its debentures in the market, is it mandatory to have a NOC from RBI, whereas the company has a registration from the Ministry of Corporate Affairs?
Regards,
Prachi Desai
---
From India, Kolkata
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---
Pls help:
1. What are the mandatory registrations for a limited company to be done, like PF, ESI, Bonus Act, etc.?
2. If the basic salary of the employees is more than Rs 6500/-, then is it mandatory to get the registration of PF?
3. Under the ESIC Act, when an employee is covered under the act, what are the obligations of the company towards the employees apart from the statutory deductions?
4. In the salary, is it compulsory to have the DA component in it? If yes, then do we need to follow the DA points/any specific rate of DA, or does it depend on the company to pay as per their convenience?
5. For a company that is selling its debentures in the market, is it mandatory to have a NOC from RBI, whereas the company has a registration from the Ministry of Corporate Affairs?
Regards,
Prachi Desai
---
From India, Kolkata
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Dear PD,
For 1-2: Attached are some lessons on EPF, please go through.
3. See the attached notes. Please use these attachments duly updated.
4. DA: Also, refer to my earlier post on this. If you're unionized employees, it is advisable to have Basic, Fixed DA, Variable DA (linked to Wholesale Price Index/Consumer Price Index indices published by the Central Govt. for every quarter. Accordingly, FDA/VDA keeps changing every quarter or half-yearly based on these indices. It all depends on the general practice followed in your line of business. For example, many IT-related firms follow the CTC model which comprises components like basic, DA, HRA or house rent/lease + other allowances & perquisites. It is prudent to follow the pattern in your line to enable you to fix the salary, etc., for your employees, making it comparable with others in such businesses.
5. I think the matters relating to the trade in debentures should be regulated by SEBI, RBI (FEMA cases), and ROC. You may check with the concerned authorities as the trade is very specialized, and information on your trade has to be kept confidential.
Kumar.S.
From India, Bangalore
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For 1-2: Attached are some lessons on EPF, please go through.
3. See the attached notes. Please use these attachments duly updated.
4. DA: Also, refer to my earlier post on this. If you're unionized employees, it is advisable to have Basic, Fixed DA, Variable DA (linked to Wholesale Price Index/Consumer Price Index indices published by the Central Govt. for every quarter. Accordingly, FDA/VDA keeps changing every quarter or half-yearly based on these indices. It all depends on the general practice followed in your line of business. For example, many IT-related firms follow the CTC model which comprises components like basic, DA, HRA or house rent/lease + other allowances & perquisites. It is prudent to follow the pattern in your line to enable you to fix the salary, etc., for your employees, making it comparable with others in such businesses.
5. I think the matters relating to the trade in debentures should be regulated by SEBI, RBI (FEMA cases), and ROC. You may check with the concerned authorities as the trade is very specialized, and information on your trade has to be kept confidential.
Kumar.S.
From India, Bangalore
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Dear Prachi,
For your queries #1 and #5, please seek the assistance of a legal consultant. PF registration is based on the "number" of employees and not on the quantum of their basic salary. Please go through the ESI Act and its provisions. Please "search" CiteHR, and you will find several threads on it, like the following: https://www.citehr.com/450524-specia...ml#post2024901
Warm regards.
From India, Delhi
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For your queries #1 and #5, please seek the assistance of a legal consultant. PF registration is based on the "number" of employees and not on the quantum of their basic salary. Please go through the ESI Act and its provisions. Please "search" CiteHR, and you will find several threads on it, like the following: https://www.citehr.com/450524-specia...ml#post2024901
Warm regards.
From India, Delhi
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With regard to point No. (1), in my view and as per the P.F. provisions, there is no relationship between issuing appointment letters and registration under P.F. The establishment needs to register itself with P.F. once it employs 20 persons on any day during the preceding 12 months.
With regard to point No. (5), an employee who worked for a minimum of 30 days in the accounting year and earned Rs. 10,000 or less per month as wages is eligible for a bonus, provided your establishment employs 20 persons on any day during the preceding 12 months. However, the bonus needs to be calculated on wages not exceeding Rs. 3,500 per month.
B. Saikumar
HR & Labour Law Advisor
Mumbai
From India, Mumbai
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With regard to point No. (5), an employee who worked for a minimum of 30 days in the accounting year and earned Rs. 10,000 or less per month as wages is eligible for a bonus, provided your establishment employs 20 persons on any day during the preceding 12 months. However, the bonus needs to be calculated on wages not exceeding Rs. 3,500 per month.
B. Saikumar
HR & Labour Law Advisor
Mumbai
From India, Mumbai
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Dear Sir, Im Prashant R. Deshmukh lst month join one Facility Management Services Industries. on e quarry- what is the rule for trainee PF ESIC Compulsory for trainee or not.please help me..
From India, Bhopal
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From India, Bhopal
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Dear Sirs,
Please help me in getting an idea about the PF and ESI registration amount:
1. Does the registration amount differ from state to state?
2. What is the amount for registration of PF and ESIC for West Bengal?
Regards,
Prachi
From India, Kolkata
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Please help me in getting an idea about the PF and ESI registration amount:
1. Does the registration amount differ from state to state?
2. What is the amount for registration of PF and ESIC for West Bengal?
Regards,
Prachi
From India, Kolkata
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