Dear All
I am working in a service sector industry with very high attrition rate.
Many times employees join & leave before completion of all formalities, sometimes even before updating their bank details.
Every month there are around 10-12 employees who join without giving proper documents & leave without intimation.
In such cases we prepare their salaries but remain unpaid as such employees rarely come back to claim their salaries. (Some are even for 1 or 2 days but when we calculate the same for one year it becomes a considerable amount unpaid in the books of accounts.)
Is there any provision or law that states procedure for such unclaimed salary? How long can we keep such amount in books of accounts before writing off?
2nd August 2018 From India, Mumbai
First of all this attrition is not good for the company.Anyway coming to the point,money needs to be sent to Labour Welfare fund of the State after 2 years.
Other learned members can comment.
2nd August 2018 From India, Pune
Thanks for the response. I got to know of the deposition of money to Labour Welfare fund from one other source too...but the period was 3 years.
2nd August 2018 From India, Mumbai
Dear Hrdarshana;
I will assume that you are working as an HR from your username. The question you are asking however should have more concern of accounts department.
As the learned member had already answered your query, I will suggest you to pay more attention towards actual issue. In your query you mentioned that people join without proper documentation. How can they join without providing documents. Then you said company have high attrition and people leave without intimation that is something you should be concerned about.
Please think over it and try to complete documentation before joining.
Regards
3rd August 2018 From India, Pune
Dear Hrdarshana,
First of all you have mentioned about attriation rate, this is really not good for any organisation. You also mentioned employees join without proper documents, this signified that polices and term are not on professional level of company. first you should focus on this issue, go for proper documentation-on boarding formalities, you must see a good effect after a time.
For unpaid amount, if you have any contact details than you can contact them to collect their salary amount, or else secure all amount and deposit in company funds or in labor welfare organisation.
Seniors and fellow friends may clarify more.
Thanks & Regards,
3rd August 2018 From India, Delhi
Dear Hrdarshana,
The employer is absolved from the liability of making payment as soon as it deposits the unpaid accumulation to the Labour Welfare Board. The Board displays Notice in at least two local newspapers and in the Establishment in June and December every year for three years inviting claims from such unpaid employees/workers.
If claim is received within four years from the date of first notice the Board shall transfer the amount to the "Prescribed Authority" appointed under section 15 of the Payment of Wages Act 1936 who will decide the matter. If no claim is received or the claim is refused , the unpaid accumulation/money shall vest in the State (State Government) and shall stand transferred to and from part of the fund.
Besides, Sec 25A of the Payment of Wages Act 1936 provides that the employer has to deposit unpaid wages of deceased worker where there is no nomination to the said "Prescribed Authority" under the PW Act 1936 who will deal with the matter as prescribed.
In your case if Nomination has been taken under the Payment of Wages (Nomination) Rules 2009, the unpaid amount may be paid to the nominee of the employee with no hassles.
5th August 2018 From India, Kolkata
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