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Each organization has its own Salary Day, fixed for releasing wages/salaries to its employees. Sometimes, this day differs by few days, due to some reasons, like computer breakdown, strikes by banks, or yearly closing work of banks, hartals in city etc. Such delay in payment of salary by one or two days is willingly accepted by employees too. There are some employee-friendly companies, who release salaries, earlier also, when they smell that the salary day is likely to get disturbed, due to some reason.

I would like to know, when a Salary day falls on Holiday or Sunday (which is known to all well in advance), when the payment is suppose to be effected. A day earlier to the fixed salary day or on a later day ! Is there any legality !! What law says !!

In todays world, many employees get direct debit to their bank a/c, on a day disclosed by them to their banks, for the monthly deductions of loans, premiums etc. A delay in crediting salary to their a/c, even by a single day, may result to payment of penalty for bouncing EMIs etc.

Members are requested to express their views.
2nd September 2013 From India, Mumbai
As long as it is not contravening Section 05 of Payment of Wages Act there is no problem. As employee friendly culture it can be deposited before a day of Holiday / Sunday
2nd September 2013 From India, Pune
My dear friend
You have already answered your own query !!!
"There are some employee-friendly companies, who release salaries, earlier also, when they smell that the salary day is likely to get disturbed, due to some reason.
A delay in crediting salary to their a/c, even by a single day, may result to payment of penalty for bouncing EMIs etc. "
This is indeed the practice in all good companies.
Warm regards.
2nd September 2013 From India, Delhi
My Question is, in case there is a holiday / Sunday, falling on Salary Day, is it not a compulsion on employer, to release salary on earlier day ?
2nd September 2013 From India, Mumbai
Practically, I have seen in many companies that credit salaries to the employee's account earlier in case of there's leave or an off on the day salary credit and it is really a good practice that is employee friendly too. I many payroll software the date is defined for the salary transfer that automatically send instruction to the bank or authority regarding that...also it can be customized in case of holiday or leave so that the salary get credited on or before the salary day.
2nd September 2013 From India, Lucknow
Hello Abhay Bandekar,
Thank you for posting your query.
I agree with all Senior members who have commented on this post earlier. What they have mentioned is correct.
If you review global standards, payroll processing has transformed to be more employee friendly. That is why in certain industries payroll processing dates are between the 25th and 30th of every month, irrespective of a scheduled or unscheduled holiday. This enables you to avoid any delays.
If you claim to be an employee friendly Organization, this is the first step in ensuring your organization stands by that repute. After all, Salary is the key criterion why an individual employee would associate with you.
Regards
2nd September 2013 From India, Mumbai

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Dear Abhay,
The Company has to pay salary by cheque by the 7th of next month. If they do not adhere to this timeline, they have to pay salary in cash before the 10th of the next month. As long as the Co. adheres to this timeline there isn't any other compulsion regarding day of payment of salary.
2nd September 2013 From India, Pune
Dear Abhay,
Above all Prashant is right.Salary for those who are under purview of Payment of wages act i.e.salary > Rs 10,000 should be paid before 07th if Employee less than 1000 irrespective of holiday
Mangesh Wakodkar
3rd September 2013 From India, Pune
Hi Abhay :
I understand your concern. Infact I often face this dilemna. As HR, I always try to convince Mgmt to process the salaries on time but I have seen that when a salary date falls on a holiday or a weekend the mgmt prefer to process the salary on the the next working day and not prior to holiday. It is ironic. Certainly it requires a employee friendly management who considers the sensitivity of the employees during such situations. We as HR should never stop representing what is most appropriate for the employees though it may require hardselling at times.
- Gia
3rd September 2013 From India, Pune
Dear Friend,
It is always better to pay slaries on the last working day of the month. Hence there is no confusion with the dates. For salaries you may calculate your month from 21-20 so that Payroll team has enough time to process salaries.
3rd September 2013 From India, Madras
hi, Abhay Mine is a govt organization and salary here are transferred on last working day of month in practice. Its always better to pay salary day preceding the holiday.
3rd September 2013 From India, Ratlam
Dear Abey,

I appreciate you for being HR professional, who is concerned about the difficulties and requirement of workforce. I have seen the mails of most of the members, who have given their views. But very few have examine your query from the statutory angle.

You may be aware that Section 5 of the Payment of Wages Act, 1936 stipulates that the every employer is responsible for the payment of wages to the persons employed by him within the time stipulations.The wages shall be paid before the expiry of the 7th day of the following month if less than 1000 persons are employed and if he employs more than 1000 workers, before the expiry of the 10th day of the following month. As regards your query as to when a Salary day falls on Holiday or Sunday (which is known to all well in advance), when the payment is suppose to be effected. A day earlier to the fixed salary day or on a later day! Is there any legality!! What law says!!

I have already explained the statutory requirement in my mail above.If you read Section 5 carefully, the wording has been very carefully structured by the legislators. They have used the words [COLOR="Dark Red"]before the expiry of the 7th or the 10th day of the following month[/COLOR],as the case may be.Hence if you are making the payment a day later,it comes under the category of "Delay in payment of wages", which gives rise to CLAIM as mentioned under Section 15 of the Payment of Wages Act, 1936.Section 19(6) deals with "Penalty for offences under the Act" which reads as under :-

If any person fails or willfully neglect to pay the wages of any employed person by the date fixed by the authority in this behalf, he shall, without prejudice to any other action that may be taken against him, be punishable with an additional fine which may extend to seven hundred fifty rupees for each day for which such failure or neglect continues.

It is thus always safer and in the interest of employer as well as employees to make payment of wages a day earlier when the salary/ wages day falls on Holiday or Sunday.

BS Kalsi

Member since Aug 2011
3rd September 2013 From India, Mumbai
I Agree with Mr.Kalsi .....for the payment we need to refer payment of wages as Mr.Kalsi says that should be earlier in a day .
3rd September 2013 From India, Bangalore
Kalsi - I appreciate your answer to this query. To the point and straight.
4th September 2013 From India, Mumbai
Excellent guidance by Mr Kalsi, very clear and transparent. Many thanks to Mr Kalsi, as well to all participants.
Still one more doubt to be cleared…
As guided by you/ law, last date for payment of wages/salaries is 7th/10th, and cannot be extended. Ok fine.
But, suppose an organization has fixed its salary day as 5th of the month, by its policy. Is it binding on them lawfully to maintain this date, or Can it be extended, if 5th is a Sunday/holiday.
Term “date fixed by authority” – is referred to which authority – an organizational authority or lawful authority of section 5 ??
4th September 2013 From India, Mumbai
hi Abai,already seniors have posted the same reply as under. In our company, all the salaries are debited in the respective employees' accounts from 25th of the month to 30th or 31ast of the month despite there being a holiday in between.
4th September 2013 From India, Chennai
Dear Abey,

Thanks for the appreciation.My clarification to your queries point-wise is as under:-

1.But, suppose an organization has fixed its salary day as 5th of the month, by its policy. Is it binding on them lawfully to maintain this date, or Can it be extended, if 5th is a Sunday/holiday-In all labour laws-- One should always remember that the legislators have enacted the basic and barest minimum facilities required to be provided to the workers under the all the labour laws to stopped the exploitation by the employers.Everybody is welcomed to provide over and above the statutory provisions.The Payment of Wages Act, 1936 requiring to make payment before expiry of the 7th or the 10th day of the following month,as the case may.As long as you make payment before the dates mentioned in the Act, your action is perfectly in order.

In most of the labour laws, you will find in-built provisions, where the appropriate Govt has been empowered to grant exemption on being satisfied that the establishment is providing facilities or benefits,which are more favorable comparing to the statutes.

2.Term “date fixed by authority” – is referred to which authority – an organizational authority or lawful authority of section 5 ??--If you go through Section 15 the Payment of Wages Act, 1936, the appropriate Govt is empowered to appoint the authorities to hear and decide for any specified area all the claims arising out of deductions or delay in payment of wages and impose penalty arising out of malicious & vexatious claims.

BS Kalsi

Member since Aug 2011
4th September 2013 From India, Mumbai
This is really a healthy discussion, and we all should be grateful to Mr Kalsi for sharing such views which have a strong legal and logical base. Lots of learnings can be done and knowledge updated, witch such comments.
Very happy and satisfied with everyones expressions. Once again thanks to all.
4th September 2013 From India, Mumbai
Dear friends,
The regulations reg. payment of wages are one of a few fundamental laws involving governance of labour in any establishment. It's puzzling how could there be such queries arises among HR personnel. The Act is very clear so far as the due date of wages is concerned. The basic four stipulations are -
1. NO WAGE PERIOD SHALL EXCEED ONE MONTH
2. If employees strength is < 1000, wages should be paid on or before 7th of the following month
3. If employees strength is > 1000, wages should be paid on or before 10th of the following month and
4. Wages should be paid either in coin cum notes or by cheque or by crediting to the Bank a/cs of the employees.
The query is if the due date happens to be a holiday whether to pay before the due date or after the due date.
Is't that much difficult to find the answer based on these four stipulations ? Surprising. You know the answer.
4th September 2013 From India, Bangalore

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Sincerely appreciate the above comments by ‘loginmiraclelogistics’, which is pointing out that when law is very clear, how can we talented HRs are discussing on such kind of simplest query , which std 7th student can answer.

Here, I would like to bring to the attention of my learned friend ‘loginmiraclelogistics’, a point which might have skipped his attention, and which is a very very serious issue, if at all he respects an employee’s concern.

The discussion started on 2nd sept, with my original post, and the main point on which I expected members views is not about the final dates for releasing wages, under any act. It is to know that if any organization makes a policy of its own fixing a date of salary, say 1st of every month, and if this date falls on a holiday/ Sunday, is it binding on company to release payment on earlier day or not.

The above question was raised because …

(please refer original post, and few lines are reproduced below, for ready reference…)

“In todays world, many employees get direct debit to their bank a/c, on a day disclosed by them to their banks, for the monthly deductions of loans, premiums etc. A delay in crediting salary to their a/c, even by a single day, may result to payment of penalty for bouncing EMIs etc.”

Am I not justified by putting this issue to members discussion !!
4th September 2013 From India, Mumbai
Dear Abaay,

Referring your specific issues I would appreciate if you look at the pertinent stipulations i.e.:

1. The wage period cannot be more than one month and

2. Even if there is a default it shouldn't be "wilful" . The onus lies with the employer to prove that it's not "wilful".

You might have come across many instances where employers postpone payment of salary (either temporarily or permanently) for various reasons like paucity of funds, "sick"ness, strikes/lockout, closure, merger and demerger and so on (recall recent KFA case). In such cases it is the responsibility of the employer to properly notify the employees and seek permission, in advance, of the concerned authorised Labour Law enforcing authorities such as ALC etc. This will help the employer to escape penal action by them.

In your case it is necessary that you should not err on the wrong side by choosing to defer the salary payment after the due date (might have been fixed by you under due approval of the designated authorities.)because of intervening holiday. The pre-ponement is always safest and appreciable.

With regards,
4th September 2013 From India, Bangalore
Respected kumar Sir

I do not find fault with abhay bandekar's putting across certain queries to find out the factual position prevailing on the ground realities vis-a-vis the statutory provisions under the relevant legislation.Everybody has certain qualitative professional knowledge, which varies from person to person.The Cite-HR is a platform where we share our views & knowledge. Your mentioning in your mail that "It's puzzling how could there be such queries arises among HR personnel". is absolutely wrong & absurd.By doing this, you are discouraging the new comers or the persons who want to clear their doubts.To think that all the members of the cite-HR are from HR personnel is again incorrect and a wrong concept.By attaching a copy of the Act in the mail does not make a person knowledge enriched.If he law would have been so clear,there would not have been any scope for two lawyers to fight a particular case on a single point of law.We have spend our whole career in HR but still we can not claim that we have mastery over the labour laws.

I regret, in advance, if I have hurt your feelings.

BS Kalsi

Member since Aug 2011
5th September 2013 From India, Mumbai
Depends on management decision whether to give early or later when such situation arise (their prerogative right)
5th September 2013 From Saudi Arabia
Dear Abhay,
As per section 4 of payment of wages act your company should have a fixed a wage period within which the same should be paid.
As per section 5 of the same act subsection
(a) any railway, factory or 1*[industrial or other establishment] upon or in which less than one thousand
persons are employed, shall be paid before the expiry of the seventh day,
(b) any other railway, factory or 1*[industrial or other establishment], shall be paid before the expiry of the
tenth day, after the last day of the wage-period in respect of which the wages are payable.
i.e. suppose you are you calculate the wage period as 1st of every month to 30th or 31st of that month then the wages should be paid on or before the 7th or 10th day of the subsequent month as the case may be.
So it should not be a worry the salary day falls on a holiday or not. Only thing you have to see is whether the above stipulated period of 7th or 10 day as the case may be is followed.
9th September 2013 From India, Hyderabad
Dear Abhay,
With regards to your concerns about the emi's of employees, I would like to inform you that it is not mandatory for the employer to release the salary prior to the date of salary if it falls on a holiday but to only see to that it is paid within the stipulated time as per section 5a/b of payment of wages act.
However if the last day of the payment of wages falls on a holiday then yes definitely the employer has to make the payment on the last working day prior to the holiday.
9th September 2013 From India, Hyderabad
Dear Friend
As per PAYMENT OF WAGES ACT, 1936:-
The wages of every person employed be paid:
1) When less than 1000 persons are employed shall be paid before the expiry of the 7th day of the following month.
2) When more than 1000 workers, before the expiry of the 10th day of the following month.
Applicability of Act
1) Factories, industrial Establishments, Tramway service or motor transport service, Air transport service, Dock, Wharf or Jetty, Inland vessel, Mine, quarry or oil-field Plantation, Workshop, construction activities or other establishment etc.
2) In the state of Maharashtra the Act is extended to Shops & commercial establishments
9th September 2013 From India, Mumbai
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