Note: Please print on People™ Letterhead
Recipient Name Date
Designation
Client Name
Address,
Address,
City, Country
Re: People™ Employee Outsourcing Services
Dear Mr./Ms./Mrs. Last Name
People™ (Professional Employers Private Limited), a group company of Equity Exchange & Trust, is one of the largest HR and process outsourcing firm in Pakistan. Since its establishment in 2001, People™ has gained a reputation for provision of world-class services to clients across all industries.
People™ provides complete HR capital development and management solutions, including Executive Search, Employee Outsourcing, Payroll Management, HR Strategy, Organization Development and Training & Development.
People™ is an ISO certified company and has offices in Dubai, Karachi, Lahore and Islamabad.
Further to our discussions regarding the subject, we are pleased to submit our proposal for provision of Employee Outsourcing Services to Client Name. The following write up outlines the scope of work, methodology, payment mechanism and ensuing terms and conditions.
The following scope of services is proposed for Client Name.
1. Recruitment, Pre-screening, selection and outplacement
2. Verification of Documents and References
3. Records Maintenance including Leave, Bonus, Medical and Benefits
4. Processing of Salaries, Bonuses, Encashment of Leave etc. and Terminal Dues
5. Deposit of Statutory Payments (EOBI, social security, tax, etc.)
6. Income Tax Management of Employees
7. Medical Benefits/Issuance of Service Certificates
8. Attrition Management
1. Recruitment, Pre-screening, Selection and Outplacement
People™ solicits applications through its database of over 18,000 applicants, personal contacts, client referrals and/or through advertisements (in newspapers etc.) as needed. Representatives from the client organization and People™ interview short-listed applicants before making final selections. Compensation is also determined in accordance with the outplacement cost agreed by the client organization. This process is followed by the issuance of the appointment/job contract letter to the selected candidates for commencement of service with People™.
2. Verification of Documents and References
People™ carries out the process of checking personal references, employment history, education credentials and all other testimonials submitted against original documents.
3. Records Maintenance including Leave, Bonus, Medical and Benefits
Whilst supervision of People™ staff is the responsibility of client designated officers, People™ assists staff management viz. maintenance of staff personnel records, leave management (framing of policy, issuance of application and management of leave data base), and maintenance of benefits such as (payment of bonuses, leave fare assistance, leave encashment, medical reimbursements etc.). People™ maintains a separate file for each employee to facilitate records maintenance of benefits.
4. Deposit of Statutory Payments (EOBI, social security, tax, etc.)
People™ ensures that all statutory payments viz. social security (if applicable) EOBI, group life Insurance and gratuity etc. are made to an individual or to the related government agencies and accordingly indemnifies its clients against any claim(s) in this regard. Evidence of such deposits is made to clients upon demand.
5. Income Tax Management for Employees
People™ calculates and maintains a proper database for staff earnings. Individual tax calculations are done keeping in view the expected total income during the year and tax is deducted accordingly. People™ ensures that the monthly tax obligations are fully met as per law and provides year-end tax deduction certificates to staff. People™ ensures that any tax payable at the time of separation, on account of bonuses and/or commissions, is deducted as per law and deposited. People™ also ensures that staff income tax deductions are also complied as per law on a quarterly basis.
6. Processing of Salaries, Bonuses, Encashment and Terminal Dues
Monthly salaries are processed by People™ and paid to staff through cheques, account transfers or other suitable means. In addition, People™ also makes other payments to staff i.e. commission, yearly bonus, performance bonus and terminal bonuses etc. These are calculated as per the individual entitlement/period of service and are settled at agreed timings on a monthly, quarterly or yearly basis. Staff members are provided with salary slips detailing monthly and year-to-date compensation, deductions and recoveries. A database of this information is readily available for review by clients as needed.
7. Medical Benefits / Issuance of Service Certificates
For salaried staff, People™ reimburses all medical expenses as per the policy of the client. People™ issues service certificates to staff facilitating them to secure credit cards, personal loans and other such personal transactions. People™ also issues no objection certificates (NOCs), upon cessation of service, in providing a clear work history certification for staff to use when applying for their subsequent job.
8. Attrition Management
People™ facilitates management of staff attrition in order to maintain or enhance the strength of staff on its payroll. This attrition management ensures that client organization’s operations continue without interruptions and there is flexibility to manage workload variations.
People™ Service Charges
People™ offers the complete set of employee outsourcing services (i.e. identifying, hiring and outsourcing) at a competitive rate of 10%.
An illustration of the sample cost calculation is given below:
Description / Staff Salary (PKR)Base Salary / 12,000
Additional Charges For:
EOBI 1 / 300
Group Life Insurance 2 / 40
Gratuity 3 / 1,000
Social Security 4 / -
Notice Pay 5 / -
Cash in Transit Insurance 6 / 167
Contractual Liability Insurance 6 6 66 / 167
Third Party Insurance 6 / -
Medical Insurance 6 / 99
ID Card 7 / 100
Uniform 7 / -
CNIC Verification 8 / 50
Last Degree Verification 8 / -
Total Additional Charges / 1,923
Sub Total / 13,923
People™ Service Charges @ 10% / 1,392
TOTAL / 15,315
These numbers are derived based on the description of services mentioned above and the assumptions explained as follows:
1. EOBI (Employee Old Age Benefit)
According to law, any staff working at industrial, commercial and other organizations should be registered under Employee Old Age Act, which provides financial assistance after attaining the age of retirement according to the EOBI rules. The current monthly contribution is @ 6% of minimum wage (which currently is Rs. 6,000/ p.m) out of which 5% is contributed by the employer & 1 % is contributed by the employee.
The maximum contribution is Rs. 360/- per month (i.e. 6% of Rs. 6,000/-) out of which Rs. 300/- is contributed by the Employer & Rs. 60/- is contributed by the employee. The same is deducted from their salary at the time of payroll processing & deposited with relevant department within given time frame. People™ will provide necessary assistance for registering the client organization and subsequently for registering staff and completing necessary formalities for issuance of their registration number and the EOB cards.
2. Group Life Insurance
Employees are insured for a minimum mandatory coverage of Rs. 200,000/-. Premium payments on account of this coverage have been added to the overall schedule of charges stipulated in the table above. People™ has arranged for a discounted premium policy with a leading insurance coverage provider at the rate of Rs. 40/- per month per employee. Staff up to the age of 58 years shall be insured without medical examination.
3. Gratuity
Gratuity as per labour laws is payable at the last drawn salary. However, if the services of an employee are terminated on account of misconduct, he or she shall not be eligible for the payment of gratuity.
4. Social Security
It is assumed that staff hired and placed at Client Name would be drawing a minimum salary of Rs. 6,000/- per month as per regulations set by Government of Pakistan. Salary of employees ranging from Rs. 6,000/- to Rs. 10,000/- will attract regulatory payments on account of social security, maximum contribution of which is presently Rs. 600/- per employee per month.
5. Notice Period
One month’s salary shall be payable to the separating employees in lieu of one month’s notice for termination. Those employees who are dismissed on account of misconduct will not be eligible to receive this benefit.
6. CIT, CLI, Third Party Insurance, Medical Insurance
People™ has negotiated attractive rates for each of the above facilities with reputable insurance providers and vendors. Should Client Name wish to provide such facilities to the staff outsourced through People™ such services will be billed at the respective rates. Client Name will accordingly reimburse the actual cost incurred by People™ on providing Cash in Transit Insurance (to cover loss during transaction of cash from one place to other), Contractual Liability Insurance (to cover negligence, Omission and fraud by outsourced employees), Third Party Insurance (to cover any loss due to bodily or physical damage by outsourced employee to Client Name or its clients), Medical Insurance (to cover inpatient and/or outpatient medical expenses) and other such facilities.
Medical insurance cover for every employee on per year basis is Rs. 150,000/- whereas Contractual Liability Insurance limit for every employee is Rs. 200,000/- for each and every loss and Rs. 500,000/- on aggregate.
7. ID Card & Uniform
Identification Cards will be issued to outsourced employees to wear it at all times during Client Name working hours. Uniform will be supplied to outsourced employee, if it is prerequisite of the job and will be billed to Client Name.
8. CNIC & Last Degree Verification
CNIC verification will be done through NADRA Verisys and verification will be shared with Client Name and output will also be placed in employee’s personal file for the record. Last Degree verification will be done from the concerned board/technical board or university which may take extended period of time and will be billed to Client Name.
Terms & Conditions
The term of assignment of payroll management will be for the duration of duration, beginning on a mutually agreed date; extendable to another term of one year on mutual agreement of both parties.
The ensuing terms and conditions and service levels are detailed in the Service Agreement and Service Level Agreement (SLA).
We hope that the above proposal will meet with your expectations and look forward to starting a value based relationship. Please feel free to revert if you have any questions.
Regards
People™ Representative Name
PEO Proposal – Client Abbreviation/ PeopleTM Page 6 of 6