Attendance Cut Off Date For Salary Calculation In Case Of New Joinees.
Current scenario: The attendance cut off date for the purpose of salary disbursement in case of new joining- is 24th of every month currently. This actually means that anyone who joins on or after 25th gets paid for remaining days of that particular month with the subsequent month’s salary. For eg :- if anyone joins on or after 25th of Aug’ 14, he/she will be paid for remaining 6 days of Aug with September’s salary, i.e., will be paid for 30+6 = 37 days in the end of Sept’14. In order to ensure that no one loses his/ her pay, I make sure we dont make anyone join on or after 25th till the 30/31st of that month. Proposal : Some of my peers think that it would be better if we keep 20th as the attendance cut off date for new joinees - which means that anyone who joins on or after 21st gets paid for remaining days of that particular month with the subsequent month’s salary. For eg :- if anyone joins on or after 21st of Aug’ 14, he/she will be paid for remaining 10 days of Aug with September’s salary, i.e., will be paid for 30+10 = 40 days in the end of Sept’14. I have also been told that since our bank takes 7 days to activate new salary account, it would be beneficial to keep 20th as the cut off date. Our MD, who is based outside India, is the only person who has authority to sign cheques, which means we cant pay through cheques at all. (Note: we have just started with salary accounts and are planning to call bank rep once in a month of every month for new joinees and we disburse salaries latest by 1st of every month.) I think it would not be right to change the cut off date from 24th to 20th because of following reasons: 1. Like everyone, we (HR) push candidates to join asap which means they can join anytime, even after 21st and telling them that “we are happy that you have joined early but we will pay your 10 days salary after 40 days” would be weird ! 2. When people resign to join another company, their salaries are generally put on hold by their companies and is released after 30 to 45 days in the form of F&F. If their new company will also pay them after 40 days (considering the scenario above), they will be left with absolutely no earnings for more than 1 month. This to me does not look employee friendly and makes no sense. 3. If the bank takes 6 - 7 days to activate new joinee’s account from 25th, it is important to note that it is the maximum limit, which means account will be activated by 30th/ 31st. Hence salary can be paid by 1st or latest by 2nd of the subsequent month in case of new joinees. Having said this, I want to know the pros and cons of the proposal made by my colleagues so I can make an informed decision and advise my peers accordingly. Its kind of urgent so request you all to share your opinion on this. Look forward to your replies.
You and your peers both are correct at your point and it is really appreciable that you are having an empathetic view towards fresh entries.
The thing is that whether changing the cut off date will actually solve any problem? I dont think so.
I have seen this as a very general approach to keep any date after 20th as cut off date for calculating salary which has its major drawback as reciepts of salary after a prolonged period upto 10 days. It will not make much difference whether you keep 20 or 25th as cut off date.
As regarding the point of your colleague that the bank accounts are generally opened in 7 days is no where a point. As your company has to pay salary after 35-40 days, whats the mess whether account will open in 7 days or 5 day of any such time.
You at present also have enough time for that I am not able to see any other favorable point for date change from your question. If there is so kindly disclose.
However, as per my view it is always advisable to keep cut off date as the last date of salary period and keep a buffer time of 5-7 days for calculation of salaries and thus disbursements.
This structure has its own benefit-
- No prolonged time duration for payment of salary. (Employer and employee satisfaction)
- No problems in calculating salaries for all employees because of having enough time for same.
- No issues if a person joins in even last days of month.