The employee took an advance from the company in 2017 and always requested not to reduce it from salary. Now, as he is planning to leave the job, he states that an advance more than 1-year-old is not valid. Therefore, that amount should not be deducted from his FnF. How should the advance be recovered?
From India, Bengaluru
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1From India, Bengaluru
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There is no problem if you would recover from the salary payable to him, say August salary payable is September. I presume since he is yet to submit this resignation there is going to be Notice period & salary therefore. You may have to face & manage reg. minimum take-home salary. Do you have documentary evidence of paying the advance? He should not refute the very payment of adv. to him, take care. The salary advance normally to be recovered within say 11 installments. Having not recovered so far is your fault. Using your discretion you deferred the recovery from 2017 till now. You learnt a lesson now. Of course, you cannot recover from EPF & Gratuity.
From India, Bangalore
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From India, Bangalore
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Employee if taken advance,and if the proof of advanxe taken is there ,it can be recovered any time.
From India, Vadodara
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From India, Vadodara
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Depending upon the quantum of advance disbursed, you can choose the recovery options. Please recover the advance at the earliest. If he has resigned, this amount should be recovered from the full and final settlement amount or any other amount payable to him by the company, but certainly not from PF dues or Gratuity payment.
From India, Aizawl
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From India, Aizawl
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There is no limitation of one year prescribed for recovering advance from salary. This is so particularly since the employee has been requesting to defer the recoveries. Every time such a request is made, the limitation gets extended. As per Article 61 of the Limitation Act, 1963, it allows suits filed for recovery for advances up to three years, and the period gets extended when there is a request for delaying the recovery.
From India, Mumbai
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From India, Mumbai
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In 3 years' time, do you have any documentary evidence for the payment of the advance/loan amount? Have you ever asked him to provide a request letter to avoid deducting the dues? Please review these documents and request payment of the outstanding dues. There is no time limit for the recovery of loan or salary advance dues from the employees.
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Dear friends,
Payment of salary advance (other than refundable advance from EPF Account) recoverable in convenient installments, as per operational convention and past practice, is observed in an establishment. Generally, its administration is properly guided by certain standard operating procedures (SOP). These advances are meant to defray urgent commitments, expenses, and payments such as urgent/emergency situations like hospitalization, domestic events, education, and festival-related expenses, etc. The recovery thereof is made in such a way that it is closed within a year so that employees become eligible for a fresh advance again. The policy dictates that only one advance is under recovery at a time, and at least once a year, an advance is paid with no pending arrears at the time of the advance application processing. In small offices, it sometimes occurs that employees approach the authorized officer to defer the recovery by a month or a few months to tide over critical situations, ensuring that take-home pay without deductions will be of assistance. While there is no strict rule governing the administration of salary advances in terms of amount or reason for grant/periodicity of recovery, localized practices come into play.
In the present scenario, there is no second opinion regarding full recovery. However, in the case of gratuity payment, an employer does not have the option to delay beyond a month, as any further delay would attract interest accrual until it is paid or deposited with the authorized officer. Options available to management if the exiting employee does not comply may include accepting the resignation or withholding the relieving letter/experience letter.
I hope this helps clarify the processes related to salary advances and gratuity payments in an organization.
From India, Bangalore
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Payment of salary advance (other than refundable advance from EPF Account) recoverable in convenient installments, as per operational convention and past practice, is observed in an establishment. Generally, its administration is properly guided by certain standard operating procedures (SOP). These advances are meant to defray urgent commitments, expenses, and payments such as urgent/emergency situations like hospitalization, domestic events, education, and festival-related expenses, etc. The recovery thereof is made in such a way that it is closed within a year so that employees become eligible for a fresh advance again. The policy dictates that only one advance is under recovery at a time, and at least once a year, an advance is paid with no pending arrears at the time of the advance application processing. In small offices, it sometimes occurs that employees approach the authorized officer to defer the recovery by a month or a few months to tide over critical situations, ensuring that take-home pay without deductions will be of assistance. While there is no strict rule governing the administration of salary advances in terms of amount or reason for grant/periodicity of recovery, localized practices come into play.
In the present scenario, there is no second opinion regarding full recovery. However, in the case of gratuity payment, an employer does not have the option to delay beyond a month, as any further delay would attract interest accrual until it is paid or deposited with the authorized officer. Options available to management if the exiting employee does not comply may include accepting the resignation or withholding the relieving letter/experience letter.
I hope this helps clarify the processes related to salary advances and gratuity payments in an organization.
From India, Bangalore
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