Getting paid on time is of paramount importance for the labor as they need to require care of their expenses like rent, EMIs, school fees, and other bills by the primary week of each month.
Financially stable and well-capitalized companies pay salaries on time, some even a couple of days before the month-end. And there are some startups and little firms or MSMEs who struggle to try to do so due to their tight income situation during the present pandemic, or maybe otherwise.
While timely salary may be a concern for a serious chunk of India’s workforce, the trend of bi-monthly wage payment has gained ground within the US with 36.5% folks private businesses paying their employees every 2 weeks, consistent with a report by U.S. Bureau of Labour Statistics.
This system of payment eases the pressure on a neighborhood of workers and employees who often live by the salary paid monthly and eagerly await that the majority lovely message that their bank can send: “Salary has been credited”. More so now during the lockdown induced economic and social hardships that have taken a toll on people’s livelihood and financial security.
But the 2 weeks payment system is yet to be talked about in India, including embracing the concept.
Accepting the new reality and therefore the challenge, some large companies In India have begun to introduce the concept now like Reliance which has started paying salaries bi-monthly to employees who draw a salary of under Rs 30,000 per month. and that we found that a startup has introduced the concept, paying its employees and workers bi-monthly for the past 12 months.
Pune-based Markk, a two-year-old startup, has been paying its employees and vendors every 14 days. it’s an app that currently allows users in l. a. to require pictures and videos of things in stores and tag the situation for others to ascertain.
According to Mark’s co-founder and CEO Sachin Bhardwaj, fortnightly payment lessens financial prudence and maintains proper income for workers and therefore the organization also.
“The struggle of liquidity crunch and lack of cash should be borne by the founders. You can’t give excuses to the workers and vendors at the time of paying salaries and dues. they need their EMI and income issues,” Bhardwaj said.
While bi-monthly wage payments seem to be a welcome move by Markk, it’s going to not gain in India within the near future for a spread of reasons but mostly led by the premise that folks became familiar with the monthly payment cycle and have prioritized their financial planning accordingly.
“We explored the feasibility of the fortnightly payment model but we didn’t find yourself doing it because the concept disrupts the financial planning of employees. Moreover, there’s no real advantage of paying in India every fortnight, especially with additional complexities which include payroll, PF, and taxes, et al,” said Kartik Mandaville, CEO of Springworks.
“Overheads involved the 2 weeks payment model India is far more thanks to which I don’t think the concept is viable within the near future.”
Human resource veterans also echo Mandaville’s views as they don’t think the Indian system is yet able to adopt a fortnight pay model within the immediate future. consistent with them, the absence of compliance and statutory things are major roadblocks.
“Employees might feel happy getting their paycheques after every 15 days but these are all deliberations immediately, nothing is concrete. The concept is often adopted within the future as more jobs are getting contractual in nature, especially within the blue-collar sector. I’m not seeing this model being preferred across the larger organizations because they require regular or permanent workforce,” said Rajneesh Singh, MD and founding father of human resource service and support firm Simply HR.
While the Indian government has proposed the ‘The Code on Wages’ last year that brings the supply of weekly and fortnightly to buy blue-collared jobs, it’s still collecting feedback from the stakeholders.
So it appears that the concept of bi-monthly wages may remain a perk for a couple of in India, introduced by conglomerates or startups who are willing to require on the challenge of playing their part in helping their employees and workers overcome financial difficulties at the time of a worldwide pandemic, or maybe beyond.
(With inputs from ENTrackr)