Respected intelligentsia. Pls clarify me.
I am presenting regarding staff attendance maintained by companies in recent times.
Usually, a month is defined as 30 or 31days of a month to everyone. But in companies spl. Formula.
Now the trend went on like this. From the 26th of this month to 25 of next month is a month.
How is it acceptable? Workers may lose govt. declared Holidays.. A lot of confusion for calculating the received salary month's name.
Suppose a worker if received on or before of 7th of a month for the last worked month. It is right calculation.
Whereas if it is this type of 25th to 24th of the consecutive month... Which month salary he was paid?.
Elders and HRsand Auditors pls clarify me.
Submitted.
From India, Nellore
68I am presenting regarding staff attendance maintained by companies in recent times.
Usually, a month is defined as 30 or 31days of a month to everyone. But in companies spl. Formula.
Now the trend went on like this. From the 26th of this month to 25 of next month is a month.
How is it acceptable? Workers may lose govt. declared Holidays.. A lot of confusion for calculating the received salary month's name.
Suppose a worker if received on or before of 7th of a month for the last worked month. It is right calculation.
Whereas if it is this type of 25th to 24th of the consecutive month... Which month salary he was paid?.
Elders and HRsand Auditors pls clarify me.
Submitted.
From India, Nellore
Just assume that you are paying 4 days(27 to 30/31) salary advance to the employees, and when he left the job the days what ever he worked he will get salary for those days.
From India, Hyderabad
From India, Hyderabad
Dear Gannahope,
It's in practice in many establishments to close the attendance on any day in a calendar month not necessarily on 30th or 31st. What's important here is to account the attendance of employees for a full month. This is happening when ascertaining attendance of all units & teams located in a farflung/remote areas especially in project sites. There are practical difficulties to close the attendance on end of the month say 28/29th or 30th or 31st and reach the data in time to the pay roll processor located in the central office or so for preparation of Pay rolls and arrange remittances to the bank a/cs of the employees to hit the stipulated 7th or 10th day of a calendar month. To facilitate this cycle a day say 15th or 19th(and so on) as the beginning of the pay roll cycle ending/closing on 14th or 18th as the case may be. Whatever, no doubt, leave availed/absent/official tour, holiday data gets recorded in the respective day. So there cannot be any missing link nor short or excess payment by this method. No hassle is expected. I had first hand experience on this job where we had managed over 14k employees located in 29 sites distributed all over India spread over between J&K/UP and Kerala. If you'll have any specific issues I'll clarify.
From India, Bangalore
It's in practice in many establishments to close the attendance on any day in a calendar month not necessarily on 30th or 31st. What's important here is to account the attendance of employees for a full month. This is happening when ascertaining attendance of all units & teams located in a farflung/remote areas especially in project sites. There are practical difficulties to close the attendance on end of the month say 28/29th or 30th or 31st and reach the data in time to the pay roll processor located in the central office or so for preparation of Pay rolls and arrange remittances to the bank a/cs of the employees to hit the stipulated 7th or 10th day of a calendar month. To facilitate this cycle a day say 15th or 19th(and so on) as the beginning of the pay roll cycle ending/closing on 14th or 18th as the case may be. Whatever, no doubt, leave availed/absent/official tour, holiday data gets recorded in the respective day. So there cannot be any missing link nor short or excess payment by this method. No hassle is expected. I had first hand experience on this job where we had managed over 14k employees located in 29 sites distributed all over India spread over between J&K/UP and Kerala. If you'll have any specific issues I'll clarify.
From India, Bangalore
Dear Gannahope,
Month is not defined any where as calendar month and therefore many establishments they count the days for computing attendance for salary purpose beginning from any date administratively generally from 25th or from 26th or from 27th etc. Nothing wrong in that as such but you have to make the payment on 7th / 10th day as applicable, on the end of wage period. Wage period can not be more than one month. I need not to tell you all this since you are holding the position of Dy. Commissioner of Labour.
However, while doing so, i.e. having the wage period not as per calendar month creates many other problems. Person joining or leaving in between the month create lot of issues. Even it creates problem in submitting ECR under PF.
Therefore, I suggest as under:
1. have one date fixed as cut-off date;
2. presume full attendance after the fixed cut-off date;
3. you can have fixed cut-off date different in different month;
4. if employee remain absent on loss of pay after the fixed cut-off date that absent shall be adjusted in next month;
4. thus the wage period will remain as a calendar month only and you will be free from all the confusions.
Hope you will appreciate my solution.
From India, Mumbai
Month is not defined any where as calendar month and therefore many establishments they count the days for computing attendance for salary purpose beginning from any date administratively generally from 25th or from 26th or from 27th etc. Nothing wrong in that as such but you have to make the payment on 7th / 10th day as applicable, on the end of wage period. Wage period can not be more than one month. I need not to tell you all this since you are holding the position of Dy. Commissioner of Labour.
However, while doing so, i.e. having the wage period not as per calendar month creates many other problems. Person joining or leaving in between the month create lot of issues. Even it creates problem in submitting ECR under PF.
Therefore, I suggest as under:
1. have one date fixed as cut-off date;
2. presume full attendance after the fixed cut-off date;
3. you can have fixed cut-off date different in different month;
4. if employee remain absent on loss of pay after the fixed cut-off date that absent shall be adjusted in next month;
4. thus the wage period will remain as a calendar month only and you will be free from all the confusions.
Hope you will appreciate my solution.
From India, Mumbai
Dear Mr.Gannahope,
This is in continuation of what Mr.Kumar has said about the interesting issue you raised.
The days of a month generally differ according to the calendar to which it belongs. Of course every calendar year has invariably 12 months only. But the average no of days per month differs whether the calendar is based on the earth's movement around the Sun i.e Solar Year or the Moon's movement i.e Lunar Year. Thus, in a regular Solar year, a month comprises of 30.42 days ( 365/12) and in a leap year 30.50 days (366/12). The Gregorian Calendar adopted by Great Britain and its colonies are based on the Moon in which the no of days in a month alternate between 30 and 29 days (365.2425/12 = 30.44 days ). Therefore, for the sake of ease of calculation, a calendar month is generally taken to be of 30 days. Example is the conversion of monthly rate of statutory minimum wage to that of daily rate and vice versa.
However, when we analyse the general practice followed in some industrial establishments in the statutory back drop, I am not able to find any anomaly as such you referred. Both the Payment of Wages Act,1936 [ Sec.4(2)] and the Code on Wages,2019 [ Sec.16] prescribe the wage period not exceeding a month though the term 'month' has not been defined. Besides, both the laws prescribe the time limit for payment in case of monthly wage period only as the 7th day of the succeeding month and not as succeeding calendar month. Therefore, if the wage period is fixed as starting from the 25th day of the current calendar month to the 24th of day of the following calendar month, the wages should be disbursed on or before the 7th day from the 24th of the following calendar month. The month covering more no of days in the wage period/pay roll cycle can be mentioned as the month.
When the Government of India is thinking of changing "the assessment year" under the Income Tax Act from financial year to calendar year for sake of easy understanding of the tax payers, the change you suggested is a welcome one but the practical difficulties pointed out by Mr.Kumar are also there worthy of consideration.
From India, Salem
This is in continuation of what Mr.Kumar has said about the interesting issue you raised.
The days of a month generally differ according to the calendar to which it belongs. Of course every calendar year has invariably 12 months only. But the average no of days per month differs whether the calendar is based on the earth's movement around the Sun i.e Solar Year or the Moon's movement i.e Lunar Year. Thus, in a regular Solar year, a month comprises of 30.42 days ( 365/12) and in a leap year 30.50 days (366/12). The Gregorian Calendar adopted by Great Britain and its colonies are based on the Moon in which the no of days in a month alternate between 30 and 29 days (365.2425/12 = 30.44 days ). Therefore, for the sake of ease of calculation, a calendar month is generally taken to be of 30 days. Example is the conversion of monthly rate of statutory minimum wage to that of daily rate and vice versa.
However, when we analyse the general practice followed in some industrial establishments in the statutory back drop, I am not able to find any anomaly as such you referred. Both the Payment of Wages Act,1936 [ Sec.4(2)] and the Code on Wages,2019 [ Sec.16] prescribe the wage period not exceeding a month though the term 'month' has not been defined. Besides, both the laws prescribe the time limit for payment in case of monthly wage period only as the 7th day of the succeeding month and not as succeeding calendar month. Therefore, if the wage period is fixed as starting from the 25th day of the current calendar month to the 24th of day of the following calendar month, the wages should be disbursed on or before the 7th day from the 24th of the following calendar month. The month covering more no of days in the wage period/pay roll cycle can be mentioned as the month.
When the Government of India is thinking of changing "the assessment year" under the Income Tax Act from financial year to calendar year for sake of easy understanding of the tax payers, the change you suggested is a welcome one but the practical difficulties pointed out by Mr.Kumar are also there worthy of consideration.
From India, Salem
Pay roll calculation done on the basis of leave period from 26th of the last month to 25th of current month is followed in big companies where the employee force is on higher side. This practice is still followed in many good companies - I am aware. While this practice can not be appreciated in companies where the employee force is 100/200 or below, it is a good practice for companies which employ more than 500/ or 1000 or more staff. The reason attributed to this way of calculation is to scrutinise and regularise the leave details of all employees by Time office department and advise pay of all employees (by regulating their credit & debit of leaves) to Accounts by 30th or 31st. They will get 5 days time of complete this process. After getting advice from Time office, Accounts deptt processes the pay slip and do the fund transfer to bank for crediting to employees account.
Thus if any employee takes leave in current month after 25th, same will be considered for
regularisation/LOP in the next months salary.
From India, Aizawl
Thus if any employee takes leave in current month after 25th, same will be considered for
regularisation/LOP in the next months salary.
From India, Aizawl
Yes thanks for All for your kind contribution opinions..
I thought is true big companies with larger employee s following the above comfortable to them(management s) .
I differ as it is not useful to daily contract labour and last cadre housekeeping and other small scale employees.
There is one Act
National Festival and other Holidays Act 1986.
Suppose In January 13 th or 14th or 15th are one festival
bhogi sankranthi Kani ma holiday and 26th is Republic day.
Daily labour are missing those holidays. Moreover whether the worker was given NFOH holiday on a particular month cannot say by the worker.
If we ask him in January he didn't get NFOH due to it came on February according to this calculation of 25 th to 24th of next month is a month.
Calculation of enhanced VDA is also confusing.
So at any cost Central Government should think of it and implement generally everyone known caledar month year.. Pls 🙏
From India, Nellore
I thought is true big companies with larger employee s following the above comfortable to them(management s) .
I differ as it is not useful to daily contract labour and last cadre housekeeping and other small scale employees.
There is one Act
National Festival and other Holidays Act 1986.
Suppose In January 13 th or 14th or 15th are one festival
bhogi sankranthi Kani ma holiday and 26th is Republic day.
Daily labour are missing those holidays. Moreover whether the worker was given NFOH holiday on a particular month cannot say by the worker.
If we ask him in January he didn't get NFOH due to it came on February according to this calculation of 25 th to 24th of next month is a month.
Calculation of enhanced VDA is also confusing.
So at any cost Central Government should think of it and implement generally everyone known caledar month year.. Pls 🙏
From India, Nellore
I came across this issue of date of billing to clients or salary to be made by the contractors on 25 of each month following the month pattern of 26 to 25 th of month.
This is mostly asked by CAs of the companies so that their reconciliation and closure of monthly transaction are done in time which enable them to manage their returns in time as per the IT departments.
However, it is no where made mandatory to follow such patern if best of the accounting and finance procedures are prompt and punctual.
The other aspect of following such pattern of 26/ 25 as month, is that during business operations the transaction of payments get delayed or for accounting purpose it is changed,from one party to other.
Having said this, I believe if a system is adapted for the betterment of employees and smooth business operations,there is no harm in implementingbit in good faith.
From India, Vadodara
This is mostly asked by CAs of the companies so that their reconciliation and closure of monthly transaction are done in time which enable them to manage their returns in time as per the IT departments.
However, it is no where made mandatory to follow such patern if best of the accounting and finance procedures are prompt and punctual.
The other aspect of following such pattern of 26/ 25 as month, is that during business operations the transaction of payments get delayed or for accounting purpose it is changed,from one party to other.
Having said this, I believe if a system is adapted for the betterment of employees and smooth business operations,there is no harm in implementingbit in good faith.
From India, Vadodara
Hi Bijay
So far as i know no auditor will interfere or insist anything what your salary cycle should be. It has got nothing to do with filing of IT returns either. I worked in payrolls, finance & accounts, audit and HR for a very big CPSU, state & central govt. departments, about 4-5 pvt.sector Cos, autonomous institutions as well during my 44 yrs of service nothing that sort has happened. Only stipulation legally is that every estt should disburse salary to their employees on or before 7th or 10th every month for the pertinent previous month (once in a month). To suit this date of disbursement estts can decide to follow the cycle convenient to the estts cosidering the constraints. All that what auditors should ensure is the Profit and Loss a/c of the estts should have been debited with one full year of employees’ salary, whether paid before 31st march or subsequently (as provision for accrued expenses) . There is an accounting standard relating to this (AS 15-Employees Benefits, deals with all the forms of employee benefits, all forms of consideration given by an enterprise in exchange for the services rendered by employees) which stipulates the mandatory provisions to be followed to this effect. Entire sequence is very simple and hassle free if planned & flow of feed of data is clear, adequate & timely. And there’s no need to stress upon good faith etc.
From India, Bangalore
So far as i know no auditor will interfere or insist anything what your salary cycle should be. It has got nothing to do with filing of IT returns either. I worked in payrolls, finance & accounts, audit and HR for a very big CPSU, state & central govt. departments, about 4-5 pvt.sector Cos, autonomous institutions as well during my 44 yrs of service nothing that sort has happened. Only stipulation legally is that every estt should disburse salary to their employees on or before 7th or 10th every month for the pertinent previous month (once in a month). To suit this date of disbursement estts can decide to follow the cycle convenient to the estts cosidering the constraints. All that what auditors should ensure is the Profit and Loss a/c of the estts should have been debited with one full year of employees’ salary, whether paid before 31st march or subsequently (as provision for accrued expenses) . There is an accounting standard relating to this (AS 15-Employees Benefits, deals with all the forms of employee benefits, all forms of consideration given by an enterprise in exchange for the services rendered by employees) which stipulates the mandatory provisions to be followed to this effect. Entire sequence is very simple and hassle free if planned & flow of feed of data is clear, adequate & timely. And there’s no need to stress upon good faith etc.
From India, Bangalore
Thanks kumar sir, Eventually it has been originated to facilitate to avoid hassles of reconciliation at the closure of month and it has its origin from Financial or accts departments to settle every thing in scheduled timelines and in accrodance with the statutes.
I had similar query wuth CA of my client as to why and how this month format is changed.His answer was as above.
From India, Vadodara
I had similar query wuth CA of my client as to why and how this month format is changed.His answer was as above.
From India, Vadodara
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