Dear Friends,
Please refer "Payment of wages Act" which gives the period in which employer has to pay any type of dues, ie. monthly salary, terminal dues & F&F compensation.Unless you have any reason permitted in Act you can not hold anybodies salary.
Hence first prepare ground and if can be permissible in Act then only you can hold his salary.

From India, Mumbai
No...its ridiculous to stop anyone's salary...
As some one rightly said each employee selected by employer himself......if anyone has issues with any employee, should take proper measures to handle him effectively...but there is no way you can stop his salary that too after his leaving from the company...what were you doing when he was on your rolls...
No no.. you cannot do that...please relieve him properly...otherwise you will end up taking his & his family curse...or if he is shrewd, he may drag you to labour court...beware.....
Thanks & Regards

From India, Hyderabad
Dear Yasmin,
How would you reply for this?
we recruited a head where as he/ she enjoyed all the two months without concentrating on the target to be achieved. Appointed head is bothered about much about her authority and other things and least bothered about the performance.
How about your suggestion in firing her and other options choosen by the person who starteed the post

From India, Warangal
It is possible to withold the salary,technically speaking, but it might be illegal and is most definitely unethical to do so.
Performance issues need to be pointed out in time to an employee and remedial actions need to be taken immediately. You might even go to the extent of demoting an employee and/or giving him a pay cut - but only while he is in your employment. To echo a sentiment which most of my friends have shown in this thread, witholding the salay and not giving the FnF to an employee who has resigned just displays the narrow mentality of the company management.

From India, Mumbai
Dear Phaniacp,
I am sorry if have hurt someones sentiments. BUT
we are not concerned about the firing purpose here.
we are here to solve the issue of holdong employees salary, someone has said already the employer has recruited him (this his means no one is capable enough int he management ot recruit the right person - may be), what was the immediate boss or management doing during the employees non performances time ?
Have the employee been provided with proper handover, training, support from co ordinates?
Always see the both sides of the coin.

From India, Mumbai
dear ms. smita,

please note, if your holding of salary while on duty was legal & not illlegal,

than holding of salary till the reason of holding is resolved stands.

reason can be mensioned in ff and need be mensioned the hold amount and when it will be released.

follow your management's direction...

also please REMEMBER person leaving our company is our marketing agent, he creates our BRAND image, outgoing person must be satisfied ( even if you have not paid him hold salary in FF). keep your documents clear and dont worry about court matters, your brand image and cultural image YOU as HR person creates is more important. washout all ill feelings of out going employee during exit interview.

REMEMBER real brand creator is HR department and not MRKT dept. one unsatisfied employee will damage the brand image, and it will be dificult to get a good employee in future. think 10 times before putting in action.

following are my statements :

if a production manager makes a mistake, batch is spoiled,

if a materials manager makes a mistake, production will delay,

if a marketing/ sales manager makes mistake, sales will reduce or payment will delay,

if finance manager makes mistake, fund flow will reduce,


if HR manager makes mistake, company may closed down ( try doing mistake, if you want to check the statement)

HR department is catalyst, it effects the direction of success.

Sunil Agarkar


From India, Vadodara
Dear Smita,
All the members have posted considerable suggestions. Management can not stop the 2 months pay, just because of non-performance, since it further require:
1. The Training was provided?
2. Role fitment may not be there
3. Did Management give him verbal/written warning and maintained in record?
4. was the employee given sufficient time to perform?
5. was the performance evaluated after the given time?
Finally, since he had been in employment for those months, he must been paid off..... here also it is illegal to hold the salary for 2 months.
I advice your Management to clear his F&F settlement amount at real basis to avoid future problems asap.

From India, New Delhi
Dear Smita,
(1) Except in the case of unauthorised absence, the salary of an employee cannot be withheld. Even in the case of unauthorised absence, only that part of the salary can be withheld, which pertains to the period of unauthorised absence till the period is regularised as leave due or dies-non, as the case may be. Salary for duty period cannot be withheld in any case.

(2) For bad performance, if considered necessary, you can initiate disciplinary proceeding against the employee and decide on imposition of the prescrbied penalty only, but cannot withhold salary on that plea. The salary of duty period will have to be paid, as usual, as a full and final settlement on resignation after deducting other genuine dues against the employee.

PS Dhingra
Management & Vigilance Consultant
Dhingra Group of Consultants
New Delhi

From India, Delhi
Dear Ms Smitha & All

Let this be the final understanding on this:

1. Company appoints a person knowingly well that he is capable and meets its requirements and fixes the salary

2. The terms and conditions are explicitly indicated in the appointment letter and "salary" is not an incentive based on performance and there cannot be any condition to withold salary

3. Witholding salary is a clear violation of the rules and is an unethical practice

4. If the person is not performing well, the concerned manager is responsible for he is not awake to the non-performance of the individual and he could have taken action of either advising, counselling, training and finally if not suitable call the person to improve or warn him that he will be forced to quit

5. First of all you cannot put a condition that the salary will be paid only if you perform. Even if you put (let us say), it cannot be called salary but it would be incentive based on performance. Incentive alone is not salary.

6. When there is no such condition in the employment letter, question of witholding does not arise. if you do, it is unethical and violation of law.

7. If you deduct, it is questionable and becomes unpaid dues and such amounts may have to be deposited with government (Labour Welfare Fund) with suitable reasons. Company cannot keep it.

8. Finally, why punish the employee when the company/manager did not wake up at the right time ?

9. If employee is not performing well, there are many ways to get rid off from him (after following the applicable laws).

Hence arrange to release the salary and then think of getting rid off from him or retain him after training him.

Hope the matter is clear.




Dear Smitha,

We are all humans and if one of us proves to be inefficient in a particular months; then as an HR, we need to look to reasons for the same!!

If an employee doesn't perform well, we need to conduct a couselling session and enquire about the reasons for non-performance; the reasons could be family issues, work environment etc. After, considering the reasons, we prepare an action plan and ask the employee to follow it. This is followed by periodic performance mapping and counselling session. However, if at such a point, instead if we stop the salary of the employees, with doing a root cause analysis, trust me, the employee will be demotivated, he will loose his trust and faith in the organization and will never perform!!

Well, the flipside is that he has worked for your organization and under no circumstances, u can hold his salary!! if u do so, u are provoking the employee to go legal against your organization!!

The rest have been precisely mentioned by other members!!


Rahul Chhabra

From India, Delhi

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