HR Services1

HR Services1

Friday 29 March 2013

Launch of new HR Forum to discuss HR related queries.




With help of some of same minded HR professional, we are successful in launching a new HR forum where HR professional can come together to discuss about various HR related issues and senior HR professionals who are member of this HR forum will help resolving their queries.

In the HR forum, there are various sub forums where a member can share query. These sub forums are :


Visit the forum HR SUCCESS TALK FORUM

If you are really serious about learning HR and want to grow then visit our web page LEARN HR THROUGH PRACTICAL IMPLEMENTATION

Saturday 23 March 2013

17 interesting Facts about PF (Provident Fund) act in India!!


In this post, I tried to answer some of the most frequently asked question regarding PF (Provident Fund) act. Hope this post will help you to get some of your concern regarding said Act. I would suggest that you should go through my post Fundamentals of PF act in India to get a fair idea about PF act first. I would appreciate if you share other queries in your mind through comment section so that I can add them in my upcoming post which will be continuation of this post.



FAQ 1 : Do employee joining a new company should be made member of PF, if he exceeds PF prescribed limit i.e. Rs 15,000/-?


This is most frequently asked question regarding PF. It actually depends upon some facts. 

Below are some cases and action which should be taken:

Case 1: Employee was not the member of PF in previous company—In this case you can exclude him from PF eligibility, provided his Basic +DA is more than prescribed limit of Rs 15,000/- in your organization. In case employee still wants to be member of PF and both employee and employer agree then employee can also be made member of PF.

Case 2: Employee was member of PF in earlier company—In this case, you cannot exclude him from PF.

Case 3: Employee is fresher: In this case as there is not previous employer hence he was not member of PF ever, he can be excluded from PF.

Please note:

  • You need to get Form 11 signed from employee, in which employee will give declaration about his membership in PF in previous company.
  • Also company should have a policy in place to support above mentioned actions.

FAQ 2: Do we need to continue PF membership of employee whose wages become more than 15,000/- after increment?


An employee who is member of PF as his wage (Basic+DA) is less than or equal to 15,000 get increment and now his revised wage is more than 15,000, in that case, employee cannot be excluded from PF as he is already a member of PF. Hence he will continue to be member of PF.His PF contribution can be limited to 15,000 provided company policy allows that.

FAQ 3: Can an employer reduce wages of an employee, in relation to PF contribution?


As per PF Section 12, an employer cannot do so. But in case, employer is currently deducting PF on higher than prescribe limit of Rs 15,000/- and depositing the same to RPFC, in that case, employer can reduce and limit it to Rs 15,000/-.

FAQ 4: In my company, numbers of employees are less than 20. Can we also take volunteer PF Code and start contribution?


Yes. A company can apply for PF code even if the numbers of employees are less than 20. On reaching 20 or more, it is compulsory to take PF Code.

FAQ 5: There is some ambiguity whether to deduct PF on some of the salary components like arrear, Notice Pay, Leave Encashment etc or not?


We all are aware that PF should be deducted on Basic and DA. But we always have some ambiguity in terms of some components. Here are some clarifications:

PF deduction on wage arrears : Yes, PF should be deducted on arrear paid against component which fall under definition of wages.

PF deduction on Notice pay: No

PF deduction on leave encashment : No

PF deduction on pay for maternity benefit:  Yes

Suspension Allowance : No

Special Allowance : there is an ambiguity in this case. Hence I would advise not to keep this as part of your salary structure.


FAQ 6: Principal employer is liable to pay Provident fund of contractual employee?


Yes, Principal employer is liable to pay Provident Fund in case contractor defaults in doing so, hence principal employer should ensure that contractor should have a PF code and contribute towards PF of his employee working for principal employer. In case of non availability of PF code in name of contractor, principal employer can make contribution in its PF code.

FAQ 7:  Do Part time, Employee engaged through contractor, Trainee and Apprentice comes under PF act?


Part time employee : Yes

Employee engaged through contractor : Yes

Trainee : Yes

Apprentice under Apprentice Act : No

FAQ 8: Do education institutions comes under PF Act?


Yes

FAQ 9: Can I withdraw my previous company PF after joining some other company?


No, you can not. Although every next person changing the job withdraw PF of previous company but it is not allowed as per act. 

A person can only withdraw PF, when the person is without job at the time of applying for PF withdraw and 2 months have passed. In fact, it is clearly mentioned in PF Withdraw form i.e. Form 19 also. Currently, PF Office doesn’t have mechanism to track people changing job and withdrawing PF but in future with e commerce in place, it won’t be possible for people withdrawing PF while changing the job. As per law, you are supposed to transfer your existing PF in your new company using Form 13.

FAQ 10: Can I withdraw money from PF in between? If yes, for which cases?


Yes, you can withdraw partial money from PF in following cases .

1. Marriage or education of self, children or siblings 

  • You should have completed a minimum of seven years of service. 
  • The maximum amount you can draw is 50% of your contribution
  • You can avail of it three times in your working life.
  • You will have to submit the wedding invite or a certified copy of the fee payable. 

2. Medical treatment for Self or family (spouse, children, dependent parents) 

  • For major surgical operations or for TB, leprosy, paralysis, cancer, mental or heart ailments
  • The maximum amount you can draw is 6 times your salary
  • You must show proof of hospitalization for one month or more with leave certificate for that period from your employer. 

3. Repay a housing loan for a house in the name of self, spouse or owned jointly 

  • You should have completed at least 10 years of service.
  • You are eligible to withdraw an amount that is up to 36 times your wages. 

4. Alterations/repairs to an existing home for house in the name of self, spouse or jointly 

  • You need a minimum service of five years (10 years for repairs) after the house was built/bought.
  • You can draw up to 12 times the wages, only once. 

5. Construction or purchase of house or flat/site or plot for self or spouse or joint ownership 

  • You should have completed at least five years of service.
  • The maximum amount you can avail of is 36 times your wages. To buy a site or plot, the amount is 24 times your salary.
  • Can be avail of it just once during the entire service.

FAQ 11:  How to file RTI to get update on PF withdrawal or transfer status or PF balance?

You can get immediate answers to your grievances though RTI. You can refer below article to get more detail.


FAQ 12: What is VPF (Volunteer PF)?


You can contribute more than 12% of your Basic+DA in PF and get same interest on additional contribution. This is called VPF. Please note, employer need not to contribute the same amount in this case.

FAQ 13: What is EDLI (Employee Deposit linked Insurance)?


Very few people know that PF gives Life Insurance which is called EDLI. Contribution to EDLI is made by employer and employee does not contribute anything in EDLI. Employer need to contribute 0.5% of employee wage capped at 15,000/- per month to EDLI. Employee gets Life insurance coverage under EDLI.

Currently PF has increased maximum payout which is Rs 1.3 Lakhs in case of death. Click here to download the notification.

FAQ 14: Can Employer take insurance policy from insurance company to substitute EDLI?


Yes, Employer can take insurance policy to substitute EDLI.

Employer need to ensure that the benefits from insurance policy are much better than what employee can get from EDLI through PF. Eg. Sum insured in case of death should be more than 1.3 Lakhs. Employees of the company should be aware about it and should have no objection in this. You can approach any insurance company, which provide Group Term Life insurance. 

FAQ 15: What is the interest we get on PF?


This keep changing and you need to keep an eye on such announcement from time to time. It is declared by Central Govt.

FAQ 16: Provided Fund contribution is taxable income?


No

FAQ 17: Do expats need to contribute to PF?


Yes. Please refer notification received from PF on 01st October 2008. Download the notification.

If you are really serious about learning HR and want to grow then visit our web page LEARN HR THROUGH PRACTICAL IMPLEMENTATION

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Monday 18 March 2013

PF Fundamentals everyone should know!!

Although i wanted to write about FAQ related to provident fund as i did for Gratuity Act where i have answered some of the frequently asked questions on Gratuity Act. 13 Facts one should know about Gratuity Act in India. While writing my post on PF act FAQ, I observed that it will be good if I describe about fundamental of PF Act first so that you will get basic idea before going through FAQ. This will help you to set up base for FAQ especially to those who are new in the field of labour law.



BASICS OF PROVIDENT FUND
  • PF is applicable to companies which have 20 or more employees in any of the month.
  • Both employee and employer need to contribute 12% of wages (Basic+DA) capped at Rs 15,000/- in provided fund.
  • Employer need to additionally contribute 1.36% of Basic which means total of 13.36% of wages.
  • Below are various PF Accounts under which 12% of employee and 13.36% of employer contribution get deposited.
A/c No 1: PF contribution Account : 12% of Employee side + 3.67% of employer side or whatever amount left after contribution to A/c No. 10 i.e EPS Account

A/c No 2: PF Admin account : 0.84% of Basic or Rs 500 minimum : Employer side

A/c No 10: EPS account : 8.33% of Basic capped at 15,000  : Employer side

A/c No 21: EDLI account : 0.5% of Basic capped at 15,000    : Employer side 
A/c No 22: EDLI admin account: 0.01% of Basic capped at 15,000 subject to Rs 200 minimum  : Employer side



BENEFITS EMPLOYEE GET UNDER PF ACT:


  • Withdrawal Benefit : Withdrawal of PF after leaving services.
  • Non refundable advances during membership : Can take advance for some specific purpose without leaving PF membership.
  • Superannuation Pension : Member who has rendered eligible service of 20 years and retires on attaining the age of 58 years.
  • Retirement Pension : member who has rendered eligible service of 20 years and retires or otherwise ceases to be in employment before attaining the age of 58 years.
  • Short service Pension: Member has to render eligible service of 10 years and more but less than 20 years. 
  • Life Insurance: Through EDLI, Max Rs 1.3 L in case of death.

VARIOUS FORMS RELATED TO PF ACT:

Nature of Benefit
Claim Form
By whom to be submitted
Settlement of EPF account in case of Resignation/Retrenchment
Form 19
Member
Settlement of EPF account of a deceased member
Form 20
Nominee/Legal Heirs
Settlement of Employees’ Deposit Linked Insurance Fund
Form 5(IF)
Nominee/Legal Heirs
Settlement of Employees’ Pension Account
Withdrawal Benefit (in case of members with less than 10 years of membership)
Form 10-C
Member
Settlement of Lump sum Benefit of deceased member(who had no family and died when not in service in covered establishment)
Form 10-C
Nominee / Parent
Availing Scheme Certificate(in case of members with less than 10 years of membership and or not using above two options)
Form 10-C
Member
Availing Pension (all types)
a)In case of membership of more than 10 years in EPS and attained the age of 50 for Reduced Pension and 58 for Superannuation Pension
Form 10-D
Member / /Nominee
b)Died in service/while holding Scheme Certificate and having a family
Form 10-D
Family Member
c)Died while in service and nominated any person other than the Family entitled for pension
Form 10-D
Nominee
Advances
Advances / Withdrawal (For all type of advances)
Form 31
Member
Nomination Form
Form 2 (Revised)
Member

EMPLOYER RESPONSIBILITY UNDER ACT:


  • Provide details of ownership, branches etc to PF and changes whenever occurs.
  • Submission of PF Contribution by 15th of every month
  • Submission of Form 5 (Addition of employees) and Form 10(Deletion of employees) by 15th of every month. This is now done through PF online site www.epfindia.com
  • Maintaining inspection book
  • Maintaining eligibility master
  • Ensuring that contractual employee PF is depositing as per act.
  • Authenticating PF Withdraw, PF transfer, Pension, death claim etc wherever required.

To know answer of many queries related to PF visit the link 17 interesting Facts about PF (Provident Fund) act in India!!

If you are really serious about learning HR and want to grow then visit our web page LEARN HR THROUGH PRACTICAL IMPLEMENTATION

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Thursday 14 March 2013

How to make an Ideal Joining Kit?



As promised in my earlier post, Effective On-Boarding process-Step by Step approach, here is my post on How to make an Ideal Joining Kit?




Joining kit is a document which should be given to new joiner at the time of joining, to collect various information , both personal and related to statutory compliance.

Some tips to for your Joining Kit to make difference in your induction process:
  • Use Joining Kit as document to sell your company to new joiner. Hence design it like that.
  • Company do get Joining Kit printed with an attractive cover page where cover page talks about Company culture and what company feels about its employee with company logo on it.
  • Ensure quality of paper should be same. Font and other formatting should be identical. 


DOCUMENTS / FORMS FOR IDEAL JOINING KIT


Welcome Note


This is the first page of Joining Kit and used to welcome new employee. Welcome note should be composed of following information.  

  • Welcoming new employee
  • Write brief about your company and its policies which are employee friendly.
  • Write about your website so that new employee can go through it to take more information.
  • Write about content of Joining Kit. You can also describe importance and relevance of each document.
  • Write about where to send filled Joining Kit along with other documents like educational proof, address proof, experience letter etc. This is for new employees who are joining at locations where HR is not situated.
  • Provide official HR email id for future communication.
  • Write closing message.
As every company is different hence I am leaving text to written on Welcome note on you although I have provided sample Welcome note along with other sample documents / forms for Joining Kit.  Link provide at the end of the post to download.

Joining Report


This is a document which should be signed by new employee as confirmation that he has joined the company on a particular date and designation. 

Employee Information Form


This is a form which is required to take information which is not available in any other documents submitted by new employee or you want to take all information in one page once again by employee. This information further can be uploaded in your HR software. This form is signed by employee hence becomes authentic document for future references.

You can collect information depending upon your requirement through this form like marital status, family details, blood group, PAN, Driving license number, Passport etc. 

I have clubbed both formats (Joining Report and Employee Information Form) in one in the sample Joining kit provided for download. If you want, you can make two different forms.

I Card Format


This is the format which should be filled by employee attaching one of his photograph and same form can be send to I Card vendor to print I Card of employee. You can mention information you need to print Identity Card. Please do mention that employee should fill it in capital letter and neatly otherwise vendor can also make mistakes in spelling.

PF Form 11- PF Declaration Form


This form is used to get declaration from employee about his previous PF Account so that you can take decision on new employee PF deduction and his eligibility. Many times employer forgets to sign and stamp the form. So you should ensure that you sign and stamp each Form 11 once it is submitted by employee.

PF Form 2- Nomination Form


This form is used to get nomination from employee. Employee can nominate its family member to claim PF in case of employee death.

ESI Form 1-  (ESI Declaration and Nomination Form)


This form is only for employee who falls under ESI eligibility i.e. whose gross is less than or equal to Rs 15,000/-. Employee should fill the information and attach a full postcard size photograph and submit the same to employer.

Gratuity Nomination Form


This form is used to get nomination from employee for Gratuity Fund. Employee is eligible for gratuity only after completion of 5 years of continuous service or death  / disablement. You can refer to my post 13 Facts one should know about Gratuity Act in India to know more about Gratuity act and other useful information.

Confidentiality Agreement/ IPR Agreement


Confidentiality agreement is an agreement between employee and employer where employee agree to not share business, process, client and other important information outside company. IPR (Intellectual Property Right) agreement is required, where company is engaged in Research & Development work and want to ensure that its employees who are engaged in these activity should not disclose about research work outside.
I have provided two formats in Joining Kit. One format has both the agreements (Confidentiality and IPR) in one document where in second agreement which is NDA (Non Disclosure Agreement) is only about confidentiality agreement.

Any other Agreement


There are occasions when company want new employee to sign some other agreement other than confidentiality and IPR, in that case, you can also keep such agreement as part of Joining Kit so that new employee can read and sign at the time of joining the company itself. For example, company wants that no employee should join competition for next 3 years after leaving the company etc.

Self Declaration Form


This form is used to get acknowledgement from employee that he has understood company policies etc. and will abide by the same during his employment with company. You can add as many as acknowledgement in the form. For example, you can include acknowledgement of understanding Confidentiality agreement, IPR Agreement and any other important policy. This declaration will help in future, in case employee at any point of time, refuse to understand HR policies etc.


Form 12 B


This form is used to get declaration from new employee about his income from previous employer and various tax rebate he got in current financial year. This is used by department which is taking care of income tax. That department needs to know previous income etc so that they can evaluate new employee tax liability for rest of month in that financial year.
Investment Declaration Form

This form is used to get tentative tax declaration from new employee. New Employee need to mention about his tax planning so that based on this, department responsible for income tax, can calculate new employee tax liability and start deducting the same. 

Bank Account Opening Form


You should also place bank account opening form. Ask your Bank Relationship Manager to provide you Bank Opening Forms in advance so that you can place them in joining kit.

Check List about documents to be submitted by employee for Personnel file


You can also place a checklist for new employee so that he does not miss to submit relevant documents for personnel file. These documents are Address proof, ID Proof, Age proof, education proof, relieving and experience certificate from last company, photograph and acceptance of appointment letter.

Joining or Induction Feedback Form


This form ensures that new employee has gone through each and every stage of induction successfully. Let employee submit this form within 07 days of his joining so that he go through each and every stage of induction as there could be some activities which will be done after first day.

Following can be component of Induction Feedback Form:

  • Feedback on Basis Induction Steps
  • Feedback on induction about Organization
  • Feedback on induction about HR Policies and procedures
  • Feedback on required infra / asset received
  • Feedback on understanding of project by reporting manager and meeting other team members
  • Suggestions from new employee to bring improvement in induction process 

I will be happy if you can add few more documents which are required to make Joining Kit ideal.

If you are really serious about learning HR and want to grow then visit our web page LEARN HR THROUGH PRACTICAL IMPLEMENTATION

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Saturday 9 March 2013

13 facts one should know about Gratuity Act in India!!




Some Basics about Gratuity:

  • Gratuity Act is applicable to all establishments, where number of employees, are 10 or more in any day of the preceding 12 months.  Click here to download the Gratuity bare act.
  • Charitable institutes and hospital are also covered under the act.
  • It includes both commercial and non commercial establishment like educational institutes etc.
  • Only Basic and Dearness allowance should be considered as wages for the purpose of Gratuity.
  • Gratuity payment formula:

Example: If an employee leave company after 10 years and his last Basic + Dearness allowance is 10000 then his gratuity will be paid as per following formula.

(10000/26)*15* 10

Please note that above formula will remain same irrespective of employee working in 5 days a week establishment.


FAQ  1: Can an employee claim Gratuity even before completion of 5 years?

Yes, An employee can claim gratuity even before completion of 5 years in followings cases:
  • Death (to his nominees)
  • Disablement

But the quantum of gratuity will be as per act.

FAQ  2: Can employer forfeit Gratuity, even if employee has completed 5 years?

Yes, employer can forfeit gratuity even if employee has completed 5 years in following cases:

  • If the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or
  • If the service of such employee have been terminated for any act which constitutes an offense involving moral turpitude, provided that such offense is committed by him in the course of his employment.


Please note that above act should have been committed by employee during his employment. There should be a proper enquiry held after which employee was found guilty for aforesaid act or misconduct. Once proved guilty, employer should issue termination note to employee describing about his misconduct.

FAQ  3: Gratuity Payment when employee has completed 4 year and 240 days in 5th year?

This is one the most frequently asked question and there are various views available on it.

As per Section 2A of Gratuity Act (Continuous Service), an employee is eligible for gratuity if he has completed:

(i) one hundred and ninety days, in the case of an employee employed below the ground in a mine or in an establishment which works for less than six days in a week; and


(ii) two hundred and forty days, in any other case;

Earlier, I was also of opinion that gratuity can only be paid once an employee completes 5 years of continuous service which is not the case now as state above.


Following is the complete draft of the Section 2A of Gratuity Act for better understanding:

Section: 2A
Continuous service.

For the purposes of this Act, -
(1) an employee shall be said to be in continuous service for a period if he has, for that period, been in uninterrupted service, including service which may be interrupted on account of sickness, accident, leave, absence from duty without leave (not being absence in respect of which an order [***] treating the absence as break in service has been passed in accordance with the standing order, rules or regulations governing the employees of the establishment), lay off, strike or a lock-out or cessation of work not due to any fault of the employee, whether such uninterrupted or interrupted service was rendered before or after the commencement of this Act.
(2) where an employee (not being an employee employed in a seasonal establishment) is not in continuous service within the meaning of clause (1), for any period of one year or six months, he shall be deemed to be in continuous service under the employer -
(a) for the said period of one year, if the employee during the period of twelve calendar months preceding the date with reference to which calculation is to be made, has actually worked under the employer for not less than -
(i) one hundred and ninety days, in the case of an employee employed below the ground in a mine or in an establishment which works for less than six days in a week; and
(ii) two hundred and forty days, in any other case;
(b) for the said period of six months, if the employee during the period of six calendar months preceding the date with reference to which the calculation is to be made, has actually worked under the employer for not less than -
(i) ninety-five days, in the case of an employee employed below the ground in a mine or in an establishment which works for less than six days in a week; and
(ii) one hundred and twenty days, in any other case;
Explanation: For the purpose of clause (2), the number of days on which an employee has actually worked under an employer shall include the days on which -
(i) he has been laid-off under an agreement or as permitted by standing orders made under the Industrial Employment (Standing Orders) Act, 1946 (20 of 1946), or under the Industrial Disputes Act, 1947 (14 of 1947), or under any other law applicab1c to the establishment;
(ii) he has been on leave with full wages, earned in the previous year;
(iii) he has been absent due to temporary disablement caused by accident arising out of and in the course of his employment and
(iv) in the case of a female, she has been on maternity leave; so, however, that the total period of such maternity leave does not exceed twelve weeks.
(3) where an employee employed in a seasonal establishment, is not in continuous service within the meaning of clause (1), for any period of one year or six months, he shall be deemed to be in continuous service under the employer for such period if he has actually worked for not less than seventy-five per cent of the number of days on which the establishment was in operation during such period.

FAQ  4: Gratuity payment in case employee has worked for more than 5 years with same employer but in different establishment?

Let’s take an example, that if an employee has worked in a company ABC for 3 years and due to some reason, he has been moved to company XYZ under same management. Employee got his Full and Final from ABC Company but not the gratuity amount as he has not completed 5 years there. He has spend another 2.5 years in company XYZ and resigned. At the time of his Full and final, will he be eligible for gratuity?

Answer is yes as both the companies are under same management and employee has completed 5.5 years to gather in both companies.

FAQ  5: Do company need to take insurance policy against LIC? Is it mandatory?

Gratuity payment is responsibility of employer. Nowhere in act, it is mentioned that employer need to take any sort of insurance policy for gratuity payment. Hence it is up to employer whether they want to take insurance policy to cover its gratuity liability.

There are various benefits of taking insurance policy for insurance company to cover gratuity liability, let’s say LIC:
  • Employer ensure that its liability is taken care by giving regular premium to LIC
  • Employer get tax rebate against that payment.
  • LIC also do life insurance for each employee hence in case of employee’s death, employee family get sum insured amount apart from gratuity.


FAQ  6: How much gratuity amount is exempted from income tax?

FAQ  7: Can a company refuse to pay gratuity due to financial Loss to employees?

No, even if company is not doing financial well, company is bound to pay gratuity amount.

Company should ensure that it pays gratuity within 30 days from the date when gratuity become payable to an employee. Also it is responsibility of employer to notify employee about his gratuity payment even if employee do not apply for same. It is employer duty to pay the gratuity.

FAQ  8: Will an employee resigning from service or retrenched by employer will be eligible for Gratuity?

Yes, if they are satisfying the criteria of completion of 5 years. In case of employee who has been retrenched after 5 years of continuous service will get both gratuity and retrenchment benefits.

FAQ  9: Gratuity in case of contractual employee. Who will be responsible to pay gratuity?

In case of contractual employee, contractor is liable to pay gratuity but if contractor do not pay gratuity to employee then principal employer can be directed to pay the gratuity amount.

FAQ  10: Will trainee be entitled for Gratuity after completion of 5 years?

Yes. But employees who are hired for some temporary work should not be considered under gratuity act. Please download some important judgement in support of this.

FAQ  11: Company making gratuity as part of CTC is correct?

This is another most debatable topic. Basically CTC stands for, cost to company and every company takes it different way. Hence, it is up to company whether they want to make it part of employee CTC or not.

There are two views:

One, employee become eligible for gratuity only after completion of 5 years so how come company can make it part of employee CTC and what if employee do not complete 5 years and leave the company before.

Second, as it is liability of employer to pay gratuity to employee in two cases: 1) when employee competes 5 years and 2) in case of death and disablement irrespective of completion of 5 years hence employee should make it part of CTC especially when employer has taken insurance policy to cover gratuity liability.


FAQ  12: What is the ceiling of gratuity amount payment?

It is Rs 10 L. In case an employee gratuity amount is more than 10 L then company is bound to pay max 10 L. In case company want to pay more than 10 L then company can pay it as performance bonus or ex gratia. Click here to download the notification for same.

FAQ  13: How to treat number of months for the purpose of gratuity calculation after completion of 5 years?

For example, if an employee has worked for 5 years and 7 months then for the purpose of gratuity payment, 7 months will be rounded off to an year and he will get gratuity for 6 years but in case employee has worked for 5 years and 5 months then he will be eligible for 5 years gratuity payment only.

Have a look at next version of this post : Another 10 FAQ on Gratuity Act in India.

If you are really serious about learning HR and want to grow then visit our web page LEARN HR THROUGH PRACTICAL IMPLEMENTATION

Important Note:

Dear Friends, Due to so many comments on this blog post, I believe further comments are not visible and my replies to those comments in not getting registered. Hence request to all of you to ask your questions on our HR Forum. 

Link of the forum is as below:

http://hrsuccesstalk.com/forum/

Sunday 3 March 2013

Effective On Boarding Process : Step By Step approach




On boarding a candidate is one the important process which HR should do properly. When a person joins a company, he feels everything is new and different. First day in new office is always filled with joy, confusion, questions, hesitation, all together mixed feelings. Hence it is necessary that new joiner should be made comfortable with new environment. Person responsible for on boarding a new joiner play important role here.

Let’s see, how can we make a perfect on boarding process and ensure joining formalities are taken care?

Candidate joining confirmation


You must have informed office timing to candidate along with offer letter hence you can expect candidate to join at office in timing. First thing in morning, you need to check out, number of candidates expected to join today. You can simply confirm from your reception about candidates who are joining in office where you located and for out location candidates either confirm from admin executive (if you have any) else call candidate on his mobile to confirm his joining.  Accordingly, send intimation to all support functions including recruiter and reporting manager about candidate joining status. This is important as they also need to take action at their end and it will be good if they come to know about it in morning itself.

Making new joiner comfortable


Once candidate joins and waiting at reception, do not let him wait for long. You should welcome him warmly and let him sit in a conference room or place you have for new joiner induction process. You should ask for tea and coffee and arrange.

Joining Kit: At the same time, you can handover joining kit to candidate to fill. I would suggest that Joining Kit should be bind in form of a booklet.

There are various documents which should be part of such Joining Kit. These documents are mentioned below:


  • Welcome note
  • Joining Report
  • Employee Information Form
  • I Card Form
  • PF Form 11 (PF Declaration Form)
  • PF Form 2 (PF Nomination Form)
  • ESI Form 1 ( ESI Declaration and Nomination Form)
  • Gratuity Form F (Nomination Form )
  • Confidentiality Agreement/ IPR Agreement
  • Any other Agreement standard for employees
  • Induction Feedback Form


In my upcoming post, I will talk about above mentioned documents in detail and other useful facts about joining kit.

Personnel file documents: Also inform candidate about documents which need to be submitted for personnel file. You can also send list of documents required for personnel file from candidate while sending offer letter so that candidate is aware and get time to collect these documents and bring it along when joins.

Vital documents which you need to collect from new joiners are:


  • Acceptance of Appointment letter
  • Educational Qualification documents
  • Relieving letter/ Experience letter of last company (or all companies with whom he has worked)
  • Photographs (3-5 depending upon your requirement)
  • Permanent Address proof 
  • Present / communication address proof
  • ID Proof

Apart from other you should also keep following documents in personnel file which are already available with you:


  • Copy of resume
  • Employment application form
  • Salary proof of last company
  • All documents in Joining kit


In my upcoming blog, I will write about vital documents and other useful documents which can be kept in personnel file in detail along with usefulness of these documents.

Induction about Company and policies


Once new joiner is through with filling the joining kit and submission of personnel file documents. You can start his induction on company and its policies. It is advisable to have a presentation ready for giving induction to new joiner.

Your induction presentation should cover followings:


  • About Company
  • Top Management of Company
  • Vision, Mission and Ideology of Company
  • Various Service offering/ Product of company
  • Key Clients
  • Main HR Policies and Procedures
  • Payout Dates (Salary, Reimbursement, Incentive etc)
  • Details of Support functions contact person along with their email id and phone numbers


Normally, first day new joiner get download of so much information that it is difficult for him to remember all hence he loose his focus. You can have a Induction assessment test after induction is over. This will help new joiner to go back to main important points again and understand them.

I will soon write about induction in more detail so please wait till that time. Above, will give you a basic framework.

Bank Account opening


You need to get bank account open for new joiner so that salary, reimbursement, incentive etc can be transferred there. You can tie up with any of the bank which suits to your requirement. If you have localize operations then choose bank which has better connectivity in your area or in case of pan India operations, find bank with national presence. Now with facility of accessing any bank ATM has reduced our pain in selecting a bank as employee can withdraw money from any bank ATM. Sometimes, due to pressure of opening bank account for large number of employees located across India, especially in case of mass hiring, we go with KYC (Know Your Customer) arrangement with bank. In this case employee needs not to submit any ID proof, to get the bank account open. Only some banks provide this facility. But I would strongly oppose this practice. Please ensure that your employee do submit ID and Address proof to get the bank account open. Tomorrow, in case, bank account opened by KYC method, where you have attested and signed the bank form on behalf of employee, found involved in illegal activities, you can also be in trouble.
Coordination with Admin and IT

A new joiner require laptop / desktop, mobile, SIM, Official Email id, Sitting place, Visiting Card, Access Card, any other tool, hence it is important for HR to coordinate with these support functions to make sure arrangement of same. During pre joining formalities, we discussed that HR should inform support functions about candidate expected joining in advance so that they can make necessary arrangements. Please go through the link which talks about 3 Basic steps to do before candidate joining!!.

You can also give a demonstration to new joiner, on how to access official email id through web browser. In case you have a software, to manage HR processes i.e. HRIS, then you should also create a login for new joiner and give him training on how to access ESS (Employee Self Service) module of HRIS (Human Resource Information System) software and various benefits of same. Some companies do give notepad and pen (with company logo printed on it) so you can also see that if your budget allows.

Handover appointment letter and explain


You should handover hard copy of appointment letter to new joiner and explain the same to him, especially the salary structure part. Once he understood everything, then get acceptance on one copy to file in his personnel file and give second copy to him for his record. Don’t give it loose, please give it in company printed envelopes.

Induction about Project through reporting manager


Once you are through with HR related activities, then you can communicate reporting manager to meet new joiner. It is very important that the person to whom new joiner need to report, should meet him to set up base with each other. Reporting manager need to take out time to meet new joiner and induct him about project / department/ function on which he need to work and answer queries. Further, reporting manager should introduce new joiner to rest of team members of project/ department. HR person should, also as process, introduce new joiner to every member of branch so that rest of team members should also know about new person joining.

HR person can send mail to all employees, which should describe about person who has joined today along with his designation, past experience, educational qualification, hobbies and contact details. Normally, companies have a group email id which includes each and every employee, HR can send mail at this group id.  An advise to HR that never ever let this group email id open for every team member to be able to send mail. If it is open for everyone then anyone can send anything. So beware.

Induction Feedback and tracking


Once induction is over, you can ask new joiner to fill Induction Feedback Form. Induction Feedback form should contain all those important steps which are mandatory for new joiner ON BOARDING process. Also provide space for new joiner to give his remarks to improve the process. Do take a serious note of such remarks and implement if you found any good suggestion. Induction feedback form ensures that new joiner has gone through each and every step and his on boarding is complete now.
You should also maintain a tracker (in the form of spread sheet) which capture each and every stage of new joiner induction. It will be a consolidated sheet which can be referred in future for any sort of reporting and information required about on boarding process. It should describe TAT during each stage.

Be in touch with new joiner for initial few days


Initial few days are little difficult for new joiner as he takes some time to adjust in company. He has many queries to get answered. HR person should be in touch with new joiner for initial few days and help him in getting settled in system. Some companies do practice Buddy Program for making candidate settled in system. Please refer my blog on What is Buddy Program and how to design it?

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