Hardik Daiya
If Employee Is Leaving Organization In Next Month After Working 15 Days In Next Month Can We Hold His Salary of current month for full and final settlement in the next month
From India, Mumbai
Seasoned Ir Professional
Partner - Risk Management


Legally and ethically you should not hold the salary of a period he has worked. Therefore, the salary due shall be paid. However, the HR practices show that once an employee of managerial or supervisory cadre (not a workman) resigns, his salary for the period he worked will be kept on hold and will be released only after getting No Objection Certificates from different departments. Obviously, the NOC will be issued only after his handing over process is over. The salary for the month of resignation is held just to see if there is any negative remarks in the NOC and adjust whatever is due. Certainly, Gratuity should be paid within 30 days of his relieving and the payment of gratuity cannot be postponed indefinitely for want of NOC from the departments.
From India, Kannur

This is a practice commonly followed by most organisation to ensure that the employee completes his notice period.

However, it is an illegal activity.

Factories Act specifies the salary must be paid to the worker every month (as does payment of wages act). Therefore withholding salary till final settlement is not allowed.

On the other hand, if the employee draws salary of more than 21,000 a month, then the only way he can complian is by way of a case in labour court or as a civil claim (for interest). Therefore as there is no avenue for the employee to effectively complain, the employers take undue advantage

From India, Mumbai
legally, you do not have any right to hold the salary of a workman for the days he has performed his duties as your employee, customary practises are not governed by law, so if the employee will seek a legal remedy it will lead to consequences, i.e. compensation and damages as decided by the labour court /tribunal. We tend to believe a common practise followed by everyone as a legitimate one unless it is questioned.

If the query is to avoid any legal consequences then the best practise would be to pay the salary for the previous month, irrespective of the final settlement that shall happen forthwith.


From India, Chennai

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