Partner - Risk Management
Recruitment/talent Acquisition, Career Counselling
Private Consultant On Labour Laws
The contract employees,whose salary do not exceed Rs.18000/- are covered under the Payment of Wages Act,1936. As per Section 5 of the Act, an employer is supposed to pay the montly salary before 7th day of wage month where less than 1000 persons are working and before the expiry of 10th day of where more than 1000 persons are working. Your contention is correct, it it certainly a breach of contract by an employer, if salary is not paid in time but to enforce it, you need to take legal recourse if your salary is exceeding Rs.18000/-per month or file a complaint with the concerned labour authority of the state if the salary doesn't exceed Rs.18000/-. As mentioned by you,you can put up your resignation by giving a month's notice or pay the one month salary to the employer if you are interested to be relieved immediaetely provided your emploer agrees.
11th June 2015 From India, Mumbai
Thousand) per month, subject to TDS as per the tax laws. "
In my opinion, the above line stipulates consulting fee and not monthly salary. It is further pointed out that this depicts simply per month rate and no specific mention when to be paid. Therefore, how can we say breach of contract and how we can prove the same.
In fact, I wish to know whether Consulting Fee can be termed as Salary/Wages. And term 'per month' can bind payer to make payment on the expiry of month.
V K Gupta
11th June 2015 From India, Panipat
It is a contract with fees, not a salary. The fees is a monthly amount and for a fixed term.
So it is not covered under payment of wages act irrespective of salary limit.
I don't think the letter states he will be paid on the 30th day of each month. It is normal for bills to be paid after they are processed and therefore 50 days (meaning 20 days after the end of the month, assuming that he has submitted his bill on time) is a normal payment cycle. The second time he was paid within 10 days of the end of the month.
The legal stand is as above.
In practical terms, if it actually a salaried job shown as contract for tax purposes or to avoid long term employment commitments, then it's unfair of the emoloyer to pay late and the employee is free to resign and search for alternate jobs. But ofcourse, he can not resign, he need to send a notice of termination of contract for delay in payment of fees. But I suspect the employer can hold back his pay,net in such a case. It's a point we can't predict as we don't know the circumstances of the employment / contract.
12th June 2015 From India, Mumbai
Delay in salary/fees is a breach of agreement/contract and remedies can be in form of giving notice to cease contractual obligations.
I am sure the contract/terms of engagement would contain terms pertaining to termination of contract.
13th June 2015 From India, Pune
This condition I am facing is with the MNC company. There is no problem for permenant employees. But as I m contract employee having salary less than 15k and tds deducted is 10 percent of the salary every month. In this case I have drafted email to vp and RMG, Assistant manager head as I am into recruitment. They said we are working on payment cycle..I have submitted invoices and timesheets every last date of month ..but I can not withstand here. As grivence disclosed 2 months back ...I m here from last 3 months. .please guide..how to resign or to relieve from company..my reporting managaer is saying which is also assistant manager that you can resign and wait for 30 days np..but I am in doubt if account will release cheque in 30 days or not ..he take 50 days and said me for a contract employee. We keep 20 days pay in advance.
21st June 2015 From India,
Your payment terms and payment cycle should have been finalised when you started doing the work. Otherwise, the normal payment cycle of 50 days is quite prevalent. There is no law saying that they have two pay you the day you submit your invoice
Since you are not an employee, are you cannot resign. Instead you need to give a notice of termination of your contract on account of delay in payment. A reasonable notice of termination of 30 days as asked for by your manager
Your payment for the last bill race by you at the end of the termination period will I am sure be paid by them in the normal cycle of 50 days.
22nd June 2015 From India, Mumbai
Without getting into what the other members suggested, I suggest you look @ the situation from a different perspective.
You are on Contract for 6 months, out of which 2 months [or is it 3?] have already elapsed. The balance would be 4 or 3 months. And even IF you resign now, your Notice Period would be 30 days.....meaning whether you like it or not, you will have to serve for another month at least from the date of resigning.
And you also need to keep in mind the scenario Saswata Banerjee mentioned "I suspect the employer can hold back his pay,net in such a case" is QUITE POSSIBLE.
Another point--you have focused ONLY on the delayed salary. How about the work culture OR the work itself....do you think you are adding positively to your resume? You say this is a MNC--so I see at least the Brand name being added in a positive way to your resume.
And Nathrao is right about our legal system--"remedy is worse than the disease".
My suggestion is for you to continue till your completion of contract & move over with the Experience Docs....since it's a Contract, the Company may not hold any of your last month's Fees/Salary.
In a way, you are better off than permanent employees who don't get their salaries on time. In your case, you at least KNOW when you need to move-on. While this MAY NOT be the Best-case-Scenario one desires, it surely is NOT the Worst-case-Scenario too.
All the Best.
22nd June 2015 From India, Hyderabad