HR Payroll Issue Resolution Summary

Freeset works with communities coming out of desperate poverty. As a result, getting our wages paid consistently, on-time and accurately is of huge importance to us. We want to make sure we honor our commitment to our staff. Also, when we do mess us, we have to resolve it fast because the impact to our women is immediate and considerable. Below, we have noted some resolved issues and some open issues pertaining to wages and payroll at Freeset.

1) Development of productivity based overtime

• In April 2018, to manage surges in demand, Freeset piloted an overtime program in its Kolkata Bags unit. Top performing women were allowed to use the factory overtime to earn additional overtime pay on a piece rate basis.
• We monitored and spaced out these overtime opportunities to ensure women were not working excessive hours consecutively and maintaining worker health.
• The payment of overtime was done at the end-of-the-month and executed without any complaints.
• We have not renewed the program due to reduced demand, but the scheme may be restarted this year, given its success in 2017.

2)  Systematic payroll errors April 2018 – September 2018

• Beginning in April, we noted that every month there were a spate of errors in pay for all staff in the factory. We had hired a new HR person 3 months prior, and it seemed this person was unable to keep accurate records.
• Most of the incidences seemed to be due to errors in tracking leave.
• Errors in pay were resolved within 1-week of notification.
• The pattern in errors continued for 4 consecutive months, at which point the HR person voluntarily left the company.
• Our accounts team took over the process of payroll management and errors became negligible. (Any error typically takes 3-5 days to resolve).
• In December we hired a new full-time head of HR to take on the responsibility.
• In January 2018 we are expanding the HR department and searching for a 2^nd staff member to ensure capacity.

3) Delays in formal assessments and pay increases for middle-management

• Freeset had struggled systemically with ensuring pay increments were executed on-time due to lack of a consistent wage cycle. These increments were delayed up to 6 months. Staff were always paid Arrears for the delay, but the practice remained problematic.
• This issue impacted a small group of people with increments due outside of April (when we do reviews and wage changes for the majority of staff). About 10% of staff who are “off-cycle” faced such a problem.
• Starting in 2017, we instituted partial increments to all off-cycle staff to bring their assessment cycle to April, in line with the broader company.
• HR policy is now for all staff to come to an April assessment cycle within 2 years of hiring.

4) Errors in staff records and government registry

• In January 2018 our new Head of HR discovered significant errors in records and government registrations for roughly 85% of our staff.
• This issue has been attributed to negligence and inexperience of prior HR personnel who inhabited the role.
• We have staffed a team working full-time to comb all records and develop a clean database for all employees. They have been working for 2-weeks and expect to finish in by end of January.
• We also have a team tasked with migrating Freeset from excel based record keep to a dedicated HRMS platform, to be implemented by Feb 2018.
• We will be meeting with the West Bengal PF Commission to seek permission for adjustment to the government registry to fix errors in those records as well.