To retain the employees we would like to start Retention Bonus policy.
Policy will be fro retain the employees for 3 yrs.from 1/4/2019.we will add to their sal.Rs 3000/- and dectucted from their sal.monthly Rs 3000/-for 3yrs.
This R.B.(RETENTION BONUS) will be kept aside for 3yrs as R.B.and at the end i.e.after completion of 3 yrs we will will pay to him.
Is it legally?as we will not deduct P.F.E.S.I.will it be legally.if not we will not start.we will talk to Management to cancel this policy.
This policy is for Fresh enginners dip or graduate,or fresh I.T.I.employyes.for the deptt.like sales,service,solar,purchase etc.
pl.start the dis.in our group.
Jayant Nisal
From India, Pune
6Policy will be fro retain the employees for 3 yrs.from 1/4/2019.we will add to their sal.Rs 3000/- and dectucted from their sal.monthly Rs 3000/-for 3yrs.
This R.B.(RETENTION BONUS) will be kept aside for 3yrs as R.B.and at the end i.e.after completion of 3 yrs we will will pay to him.
Is it legally?as we will not deduct P.F.E.S.I.will it be legally.if not we will not start.we will talk to Management to cancel this policy.
This policy is for Fresh enginners dip or graduate,or fresh I.T.I.employyes.for the deptt.like sales,service,solar,purchase etc.
pl.start the dis.in our group.
Jayant Nisal
From India, Pune
How would you/ Your Employer account for this Retention Bomus mount Payment Component for purposes of PF deduction, Gratuity Calculation, IT Deduction, Professional Tax component and any other Eligibility and Above all
How you/your Employers intend to Make this Unauthorized Deductions a sprovided for in Payment ofWages Act?
Workers/Employees Work For Bread, But All do not Work For "Bread Alone" and More Money Never Motivated Employd Person to Continue / Stay Back.
Actively Engaged Employees can't be lured Better Create Condifitions which get them Glued to your Org (Culrure/Ethos).
Employee Commitment is By-Product of incessant Induced Sense of Belongingness not created Overnight.
Kritarth Team of Org Dev Partner
7.3.2019
From India, Delhi
How you/your Employers intend to Make this Unauthorized Deductions a sprovided for in Payment ofWages Act?
Workers/Employees Work For Bread, But All do not Work For "Bread Alone" and More Money Never Motivated Employd Person to Continue / Stay Back.
Actively Engaged Employees can't be lured Better Create Condifitions which get them Glued to your Org (Culrure/Ethos).
Employee Commitment is By-Product of incessant Induced Sense of Belongingness not created Overnight.
Kritarth Team of Org Dev Partner
7.3.2019
From India, Delhi
Dear Jayant,
You can initiate the Retention Bonus policy and it is very much legal. Many organizations run such practices in order to retain people. You can add Rs. 3000 per month to their total compensation, however do not show it as a deduction from earning. Such bonus is separate and over n above the earnings. It does not attract any PF.
As this bonus will be earned only by those who complete the stipulated period in the organization, this bonus will be taxed as per the existing Income Tax norms when it is disbursed. So as to account for the expense, your finance team needs to book provisions for it.
You can arrive at the maturity team (mentioned 3 years) basis what you want to achieve realistically with employees.
Regards,
Rahul
From India, Delhi
You can initiate the Retention Bonus policy and it is very much legal. Many organizations run such practices in order to retain people. You can add Rs. 3000 per month to their total compensation, however do not show it as a deduction from earning. Such bonus is separate and over n above the earnings. It does not attract any PF.
As this bonus will be earned only by those who complete the stipulated period in the organization, this bonus will be taxed as per the existing Income Tax norms when it is disbursed. So as to account for the expense, your finance team needs to book provisions for it.
You can arrive at the maturity team (mentioned 3 years) basis what you want to achieve realistically with employees.
Regards,
Rahul
From India, Delhi
Dear all,
In case some personal issues that employee will resign his job after completion of his first or second year, then he will get his retention bonus or he will not get ?
What will happen in this case?
From India, Banjara Hills
In case some personal issues that employee will resign his job after completion of his first or second year, then he will get his retention bonus or he will not get ?
What will happen in this case?
From India, Banjara Hills
Retention Bonus is always paid against serving of a minimum number of years/months as decided by the employer and agreed by the employee. If the employee doesnt serve that period, he/she doesnt get the retention bonus!
Regards
Rahul
From India, Delhi
Regards
Rahul
From India, Delhi
Dear Jayant,
It appears from your submission that the organisation is interested to retain employee by providing Retention Allowance @3000/- per month for 3 years = Rs.1,08,000/- at the end of 3 years. You have also mentioned that Rs.3000/- will be deducted from salary every month. Your query is also whether PF, ESI deduction is applicable or not.
What appears to me that Rs.36,000/- per year is in build in the CTC and you are processing payroll from CTC. Every month your organisation is showing 3000/- in the earning side and again 3000/- in the deduction side. This may create confusion to statutory authority (PF, ESI etc.) and also to the employee. Better you process payroll from monthly gross and do the deduction of standard items - PF, ESI, PTAX etc. Retention allowance is a carrot will be paid after completion of 3 years service with the company provided the employee will be at the payroll of the company in the month of disbursement of the Retention Allowance. This very common now a days with many organizations.
Thanks & Regds.,
S K Bandyopadhyay( WB, Howrah )
+9198310 81531
From India, New Delhi
It appears from your submission that the organisation is interested to retain employee by providing Retention Allowance @3000/- per month for 3 years = Rs.1,08,000/- at the end of 3 years. You have also mentioned that Rs.3000/- will be deducted from salary every month. Your query is also whether PF, ESI deduction is applicable or not.
What appears to me that Rs.36,000/- per year is in build in the CTC and you are processing payroll from CTC. Every month your organisation is showing 3000/- in the earning side and again 3000/- in the deduction side. This may create confusion to statutory authority (PF, ESI etc.) and also to the employee. Better you process payroll from monthly gross and do the deduction of standard items - PF, ESI, PTAX etc. Retention allowance is a carrot will be paid after completion of 3 years service with the company provided the employee will be at the payroll of the company in the month of disbursement of the Retention Allowance. This very common now a days with many organizations.
Thanks & Regds.,
S K Bandyopadhyay( WB, Howrah )
+9198310 81531
From India, New Delhi
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