HCL Technologies Makes Partial Change To Its Controversial Bonus Clawback Policy

Indian IT services giant HCL Technologies has quietly removed some of the controversial clauses from its HR policy revealed by The Reg last week, which required resigning employees to pay back bonuses.

According to the policy, employees who resign are responsible for paying back all the bonus they've received from their last appraisal cycle until their last working day (LWD).

A company email detailed that the LWD would be taken as 31 March 2022, so if a staff member leaves on 3rd March 2022, the amount paid from 1st April 2021 through to 28th February 2022 would be recovered.

The bonus recovery policy was communicated to the workforce in November of 2021 for bonuses that went back as far as April 2021. HCL began informing employees serving notice and former employees of their debt on 2 January this year.

The policy affected two different bonuses: an Employee Performance Bonus (EPB) and an advance monthly performance bonus (APMB) that is a project-specific bonus and which is not paid to every employee.

The policy drew outrage as IT labor organisations condemned the action as immoral and illegal.

Pune-based IT labor rights nonprofit Nascent Information Technology Employees Senate (NITES) president Harpreet Singh Saluja told The Register the policy was an attempt to prevent company attrition as most employees would face an undue financial burden when presented with an unexpected debt.

NITES said it had begun receiving 20 to 30 complaints per day from employees serving their notice. The complaints detailed financial hardships caused by requirements to return sums upward of $2,000 that had already been spent to receive release documents and final pay.

The labor rights org filed an official government complaint against HCL Technologies on January 5 alleging that the tech giant was in violation of India's 1965 Payment of Bonus Act. The Labor Ministry has acknowledged its receipt.

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Since then, many employees serving their notice or who had already left the company took to Twitter and other social media to vent their frustrations.

Dear HCL mgmt @hcltech stop harashing ur employees.U guys have recovered 88k from me,when i left the organization. In my opinion u guys are not employee friendly.Would request you just remove the tag employee first. And refund me my money.#HCLrefundMyBonus#HCLstopBonusRecovery

— Mayank Sharma (@avenger_aki) January 12, 2022

"Well, we have paid it back. It was a trap that I myself & every HCLite had fallen into," said another Twitter user.

Amid the backlash, the clause mysteriously disappeared from an internal HCL EPB webpage without any internal announcement.

An HCL spokesperson told The Register:

HCL's statement seems to say that the policy is justified because the company gave full bonuses ahead of time, regardless of performance from 2021 onward, and included employees with less than 10 years experience in the bonus scheme.

The company did not say whether it would be refunding bonuses to those who'd already been affected by the bonus reversal, whether the waiving off of recoveries was temporary or permanent, or whether it would also halt the policy for the other affected bonus – the AMPB.

Furthermore, HCL did not detail if there would be any change for those affected by the policy before December 22, 2021.

According to Saluja, NITES is still receiving regular complaints, mostly regarding the AMPB. The NITES prez told The Register employees were still seeing deductions stemming from the EPB bonus reversal at the onset of this week.

Saluja added:

• Wipro, Infosys and TCS feel pain of staff attrition as the Great Resignation continues
• IT labor rights group files complaint against HCL, claiming it's clawing back bonuses
• HCL accused of wage theft, underpaying H-1B workers by at least $95m a year
• India's big four services giants wrestle with staff attrition amid COVID-19 pandemic
• Booming balance sheets for India's big four outsourcers after horrible quarter at home

Yesterday, three of India's top IT service giants reported their Q3FY22 results, with all three hosting analysts' calls. Tata Consultancy Services, Infosys and Wipro all detailed high attrition rates over the past three years that forced them to raise hiring targets amid a boom in incoming deals. Those attrition rates ranged from 25.5 per cent for Infosys to 15.3 per cent for TCS.

HCL Technologies is scheduled to report its Q3 in a call tonight at 1930 ICT (1230 UTC). The Economic Times reported anticipation for attrition trends and the prediction of up to 20 per cent year on year drop in profit for the company. The company reported an attrition rate of 15.7 per cent in Q2FY22.®