How deputation works
A deputation starts with a letter that names the host organization or location, the period, the reporting arrangement at the host, allowances and who pays the salary. The parent employer usually keeps paying salary and statutory contributions and recovers the cost from the host if that is agreed. The employee follows the host's working hours and site rules, while leave, discipline and appraisal generally stay with the parent unless the agreement says otherwise. At the end, the employee returns to the parent post, or the deputation is extended in writing.
Deputation vs transfer vs secondment
A transfer is a permanent move within the same employer, with no expectation of going back. Deputation is temporary, often to another entity, and carries a right to return. The word is common in government, public sector undertakings and banks, and in private groups that lend staff to a sister company. Secondment is the similar term used by multinational companies. Client-site postings in IT services are sometimes called deputation too, though many companies treat them as assignments or business travel.
What HR must settle before a deputation
Track the end date closely. Deputations that quietly run on for years create confusion about whose rules apply, who approves leave and who is responsible for the employee's development, and they make the eventual return awkward for everyone.
- Period, extension terms and the return date
- Salary, allowances and which organization bears the cost
- Who approves leave and attendance during the deputation
- Appraisal arrangement: host feedback feeding the parent's review
- Travel, stay and insurance for an outstation deputation
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What is deputation allowance?
Deputation allowance is an extra payment to an employee on deputation, meant to cover the additional cost and inconvenience of working away from the parent organization or location. The amount or percentage comes from the employer's policy or the deputation agreement. It stops when the deputation ends and is shown as a separate earning on the payslip.
What is the difference between deputation and transfer?
A transfer is a permanent move within the same employer, such as from one branch to another, and the employee does not expect to go back. Deputation is a temporary assignment for a fixed period, often to another organization or group company, and the employee keeps a right to return to the original post. Deputation usually comes with an allowance and a written end date.