Employees Taking Too Much Salary Advance.....Pls Suggest

Dear All
In my organization, employees are taking too much salary advance by stating reasons like marriage in home, kids admission etc etc... We are receiving advance salary request every third or fourth day like anything as if the salary advance is the right for them. As a result, finance is also burdened and facing difficulties.
We have been asked to control this, so pls suggest some measures to overcome this situation.

Hi Tarun,
You need to change the salary advance policy. Make salary advance say only twice a year , assuming you must be deducting entire advance against salary for the month, if not before the first advance is not complete , second cant be given.
Also the amount of advance also can be decided as per grade or salary amts.
So restriction on no.of times advance can be given and amt of advance will reduce your difficulties.
Regards,
Harshad

Thanks Harshad for your valuable replies, as per my current policyan employee is entitled to avail salary advance up to maximum of 3 times of his monthly net salary subject to max. limit of 75K. Pls suggest what modifications can be done.

hi Tarun,
If the sealing limit of salary advance is kept equivalent to the current salary or 75% of salary, may be it can be controlled. Coz salary advance is not a loan its just the salary given in advance, so why should it be three time more than the salary.

Dear Tarun,
Advance against salary is not a big issue but the issue is how much they can take advance.
You can suggest to the management to give 50% of the salary part as advance but not exceed 70% if necessary and must be deducted from the next comming salary payable. Keep in mind if employee walkout to another organisation (job change) or absonding then employer doesn't have any thing other then losses.
Regards
Pankaj Chandan

Hi Tarun,
Salary advance should be given against the salary due for that particular month , the same can be recovered when the actual salary is paid or credited for that month. The limit you have mentioned is too high considering it is the salary advance and same you may not be recovering in the same month.
Modifications can be no.of times salary advance can be taken and the amount of advance which should not exceed half months salary for any level of employee.
Regards,
Harshad

Tarun,
Suggest the foll in your salary advance policy:

1. Restriction on the amount: 2 months of basic or net salary , upto a maximum of 50,000/-
2. Repayment: to be repaid in 05 or 06 months or earlier.
3. At the time of availing such facility, there should not be any outstanding loans or advances taken.
4. Purpose of advance: Employees need to state the purpose and validate the same by producing relevant documents, for eg if it is construction, invoice or payment records need to be produced.
5. Last, but not the least, the Management reserves the right to approve or disapprove such requests. Pls consider only genuine requests.

Hope these would help you....

Tarun,
Prepare one Salary Advance Policy:
Salary Advance shall be allowed only three times in one calander year or Financial Year.
Salary Advance shall not be paid more than 50% of the salary earned while applying for salary advance in any month.
by this method you can reduce salary advance.
Regards
Badlu

Hi Tarun,
As per my experience there should not be any policy for salary advance as if you put down the policy then the employees start treating it as their right. So have a policy as a backend which is available only to HR & top management.
The policy can have features like: -

• Max salary advance can be given upto one month net salary.
• To be recovered immediately in next month salary.
• Given only in special cases such as medical emergencies with the functional head approval.

I hope above suggestion is helpful, please revert fro any further clarification.
Regards,
Punit

Hi
Salary advance can be given to the employee only after calculating his/her working days for that particular month
advance amount must no exceed his/her earned days for that month
For example
x salary is Rs.10000per month
x is looking for adv on 15 th day
means he can eligible to receive adv of Rs.5000
If x is absent for 4 days then x is eligible to receive adv of 3500
Likewise we have to calculate the adv
If the employee left the organisation then also no problems
Regards