India Inc is progressing faster with increased revenues and widening penetration across domestic and international markets. A huge SHOUTOUT to employees who put their heart and soul into letting their organisations succeed in a competitive market. But while companies continue to grow, employees’ growth remains modest, prompting them to look for attractive opportunities laced with massive salary hikes somewhere. While they succeed in getting such opportunities, they also endure the notice period and F&F DRAMA in the company they are about to leave. This issue is prevalent across most companies, especially startups, MSMEs and alike that have more than half the working population of India.
In this blog, we will empathise with all those who endure such pain in their professional lives.
Overview of Notice Period and F&F
The notice period comes into the picture when employees resign from a particular workplace for alternate job opportunities or some other reason. This period varies based on the company and the designation the employees hold in it. While the entry-level workforce may have a short or no notice period, mid-senior and senior levels will have to contend with a notice period spanning 1-3 months for a smooth Full & Final (F&F) Settlement.
Notice Period Length is Just a Trailer, The Sufferings Arising from it is the REAL Thing!
The notice period comes with its set of challenges for the employees. Their salaries are often put on hold even if they resign after the completion of the particular payroll month. Then comes the notice period of say one month. Now the salary for the particular individual will be on hold for two months, which ideally should be for just one month. What’s worse, they will be released along with other dues after 45 from the last working date. So, employees are left penniless for three months (2 Months from the company they leave and a month from the company they join).
This prevails according to the rule book. But do companies follow the rule? Maybe just big corporations and well-funded startups. Others are found non-compliant with payroll norms. The F&F disbursal delays to eternity thanks to the inhumane approach of many companies in India’s corporate landscape. Repeated follow-ups with HRs yield no positive results, annoying employees. While some employees receive delayed salary disbursements along with other dues by following up endlessly, some don’t despite repeated attempts.
The Concept of Payroll Month Before Elaboration on Other Payroll Issues
The concept of payroll month differs from one organisation to another. Some companies follow the payroll of 21 to 20, while others keep it to 26 to 25.
If the company disburses salary on the last day of each month, it means it follows the payroll cycle of 21 to 20 (August 21 to September 20 for example). In that case, the salary will be disbursed on September 30 and the pattern will continue. Those following the payroll cycle of 26 to 25 will likely disburse salary post the completion of the first week of the month. So, the salary for August 26 to September 25 will likely be disbursed on the 7th or 8th of October.
Gratuity Delays Add to the Problem Along with Notice Period and F&F
Your longevity as an employee rewards you with gratuity disbursals once you leave the company after serving it for five years. Now the gratuity works differently. Many companies make gratuity part of the Cost to Company (CTC), while a few offer it beyond CTC. Companies that deduct gratuity from employees’ salaries in the name of CTC, in particular, should disburse the same to eligible employees. Delaying or not disbursing the same is morally wrong.
That being said, every company is legally bound to disburse gratuity to employees having successfully completed five years.
Non-Deposit of EPF Dues Further Symbolises India Inc
Companies deduct both their and employees’ contributions from salary for provident funds. However, some of them don’t deposit the deducted amount to the Employees Provident Fund Organisation (EPFO). And the pattern continues for months and years, resulting in frustration among employees.
Wrapping Up
Payroll issues are a sheer dampener to India’s dream of becoming the ‘Developed Nation’. While the laws are there in place for smooth payroll processes, the lack of strict implementation means there is a lot of catch-up work to do. We at zarooribaathai.in expect a louder voice against payroll mayhem from everyone, including the media.
