Cash-strapped Dunzo has promised employees that it will be paying an interest of 12 percent per annum on the salary component that it held back from June. At the same time, the startup assured them that it was on track to clear all dues by September 4.
The announcement to pay interest comes after Dunzo had told employees on July 3 that it will be deferring salaries for around 500 of them and will be capping salaries at Rs 75,000 from June, irrespective of what an individual’s pay package was, citing issues with its cashflows.
It was scheduled to clear all pending dues by July 20 but sent out an email pushing out the deadline to September 4.
“Thank you for your patience and continued support. We understand the inconvenience this (delay in salaries) has caused and want to ensure that we provide the possible support for the delay,” Dunzo’s payroll team said in an email to employees on July 27, a copy of which Moneycontrol has seen.
The company did not immediately respond to an email seeking comments.
“There will be interest paid of 12 percent per annum…” the email added. All employees who were impacted since June will receive interest for two months, from July 4 to September 4, when the final payout is done.
An interest rate of 12 percent per annum translates to an interest rate of 1 percent per month.
For instance, an employee who was earning Rs 1 lakh a month but was paid only Rs 75,000, because of Dunzo’s decision, in June will now receive an interest of 12 percent per annum on the remaining Rs 25,000.
So, the final payout for June – which is still slated to happen on September 4 – will be Rs 25,500, which includes Rs 25,000 that was originally held back and Rs 500 which is the interest component that became due over two months.
If honoured, the decision should come as a relief to Dunzo’s employees who have been questioning the management’s business decisions. However, certain employees still remain uncertain over Dunzo's payment plans because the company is yet to clear vendor dues, deposit the tax deducted at source (TDS) amounts since October 2022 and has a history of missing deadlines, as highlighted in a few legal notices.
On the other hand, Dunzo has maintained that over 95 percent of all TDS payments have now been made and will credit the remaining amount as well. While it arranges for capital to clear other dues, payments continue to pile up for the Bengaluru-based startup, which announced it will be laying off over 200 employees last week.
At the same time, at least seven vendors of Dunzo have sent the company legal notices demanding the Kabeer Biswas-led startup to pay its dues, Moneycontrol had reported earlier this week.
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