Salary Advance Policy

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“YOUR COMPANY LOGO”

 

 



1 Purpose

The company doesn’t encourage salary advances or soft loans for its employees.

However, in certain exceptional circumstances, Management & HRD may decide to provide a salary advance to employees to help them manage their financial needs for medical or personal emergencies.

2 Scope

The policy is applicable to all employees of “Your Company Name” across all locations including the group companies.

3 Policy
  • 3.1 Eligibility
    • 3.1.1 An employee should have a minimum of “Enter Number of Years” tenure in the organization and should be a confirmed employee.
    • 3.1.2 The employee should not be on active PIP (Performance Improvement Plan) or disciplinary warning at the time of application.
  • 3.2 Advance Amount
    • 3.2.1 Depending on the financial need the salary advance may vary between one (1) month gross salary to three (3) months gross salary (maximum).
  • 3.3 Repayment
    • 3.3.1 No interest shall be charged on the Advance Amount.
    • 3.3.2 Repayment of the Advance Amount needs to be done within 3 or 6 monthly installments (preferably).
    • 3.3.3 The installment amount shall be deducted from the monthly salary of the employee.
    • 3.3.4 The first monthly installment shall start from the next month in which advance salary was credited to employee’s salary bank account.
  • 3.4 Approval Matrix
    • 3.4.1 The salary advance request needs to be first approved by the HOD, Finance, HR Head and finally by the Management team before being processed.
  • 3.5 Guidelines
    • 3.5.1 Employee should be a confirmed employee with over “Enter Number of Years” of tenure in the organization.
    • 3.5.2 The employee should not be on active PIP, Corrective or Disciplinary action plan at the time of applying.
    • 3.5.3 The employee shall only be eligible to receive advance in case of medical emergency and personal exigency.
    • 3.5.4 An employee is eligible for salary advance only once in a block of 12 (twelve) months, provided there are no pending advances or other dues recoverable from an employee on the date of their request.
    • 3.5.5 An employee is eligible for advance only thrice, during his tenure with “Your Company Name”. However, the employee will be eligible for advance second time, only if the first advance amount has been paid and closed.
    • 3.5.6 The employee availing salary advance from office is required to sign the salary advance agreement and deposit an undated security cheque equivalent to the sanctioned loan amount in favor of “Your Company Name”.
    • 3.5.7 After successful repayment of the salary advance the employee can collect back the security cheque deposited with the Finance department.
    • 3.5.8 In case an employee separates from the company due to any reason whatsoever, prior to repayment of the entire advance amount, he/she shall be required to clear the entire pending amount upfront and settle the dues before the last working day, failing which entire pending amount shall be recovered from the full & final settlement of the employee.
  • 3.6 Application Process
    • 3.6.1 A written email request should be sent by the employee to his/her respective HOD stating the reason for the salary advance.
    • 3.6.2 The respective HOD needs to apply jurisprudence while approving such salary advance request. Employee’s performance, behavior, commitment and most importantly reason for taking Salary Advance are some of the factors that should be considered.
    • 3.6.3 The consented salary advance request then needs to be forwarded to the Talent Management (via HOD).
    • 3.6.4 Manager Talent Management shall cross check eligibility, reason for advance and also check with the Finance Department for any outstanding advance dues with the employee.
    • 3.6.5 The Talent Management Manager then shall seek the appropriate approvals from the HR Head and the Management team.
    • 3.6.6 Post the approval from Management team, the Talent Management team will get the Salary Advance Agreement signed by the respective employee and collect the security cheque.
    • 3.6.7 After advance request is sanctioned from the appropriate authority, it will be processed within a maximum of “Enter working days” of receiving the request by the Finance team.
    • 3.6.8 The salary advance amount can either be credited to the employee’s salary saving account or shall be given in form of account payee cheque only.
    • 3.6.9 In case the advance request is disapproved, the Talent Management Manager shall inform the employee stating the reason for decline (if informed by the Management).
    • 3.6.10 “Your Company Name” Management team reserves the right to disapprove any Advance request and is not liable to provide reasons for decline as deemed appropriate.
  • 3.7 Reporting and Controls
    • 3.7.1 The HOD shall be responsible for the first level approval and must exercise jurisprudence when approving such request.
    • 3.7.2 The Talent Management team and Payroll/Finance team shall ensure compliance and adherence to the approval matrix.
  • 3.8 Governance
    • 3.8.1 The Policy shall be governed by the HR department along with the assistance of the Finance/Payroll team.
  • 3.9 Exceptions
    • 3.9.1 No exceptions shall be made in the policy unless the policy is countermanded by the HR Head.
    • 3.9.2 Any exceptions in this policy can be only approved by the Managing Director.
4 ROLES & RESPONSIBILITIES

5 GLOSSARY

NA

6 RELATED POLICIES, PROCEDURES, OR OTHER REFERENCES

8 APPENDIX A

“Attach related policies & procedures”