Salary Delays for Contract Workers: What Legal Steps Can My Friend Take?

My friend joined a US MNC as a contract employee through an employee consultancy. Every month, the company delays the salary citing one or the other reason. The cheque is given by the consultancy after receiving details from the company. My friend has not yet received the salary and is very worried.

Is there a legal solution to this issue?

As per the Payment of Wages Act, 1936, an employer is liable to pay salary to his employees within 7 days of the wage month. If he employs more than 1000 workers, then he can pay it on or before the 10th. There are penal provisions and imposition of fines under the Act.

But are the employees of MNCs willing to approach the Labour Officer for assistance?

There is a feeling that if any employee files a case against his employer, there is a possibility of him being blacklisted and not receiving any good offers. Yes, it is true, and the employers are aware of this; they know that nobody will go for litigation.

In India, if a small-scale industrialist fails to pay wages, then the Labour Department will come to the site, make a long statement about the duties and responsibilities of the employer, and warn of the consequences of non-payment of salary. If a small-scale industrialist fails to pay the electricity bill, his power will be disconnected. If he supplies a defective article, the consumer redressal forum will direct payment of damages and replacement of the article. But if the same is committed by an MNC, nothing will happen. I am sure that no privilege has been given to these MNCs regarding labor laws, but they assume that they have been authorized to dilute the law.

If the employees feel that they are also employees or workmen and not "professionals" as they were until the recession started, they can approach the concerned official of the state/district for help.

Regards,

Madhu.T.K

Dear Sir/Madam,

I am working for a software company in Bangalore. My company has not paid the salary for the last 4 months, citing the recession as the reason. After speaking to the concerned department, they have informed me that the salary may not be forthcoming in the next 3 months. They are urging us all to cooperate or else leave the job. Despite the situation, we are still working as there are no job opportunities in the market.

Please guide me on what to do in this case and also advise me on the legal steps that can be taken to obtain my salary. What legal actions can be pursued against the company? The company has also carried out numerous layoffs in the past 2 months without any prior notice period or compensation.

I am in urgent need of a quick response from your side.

Thanks and regards,
Javed

As per the Payment of Wages Act, 1936, an employer is liable to pay salary to his employees within 7 days of the wage month. If he employs more than 1000 workers, then he can pay it on or before the 10th. There are penal provisions and the imposition of fines under the Act.

But whether the employees of MNCs are willing to approach the Labour Officer for assistance? There is a feeling that if any employee files a case against his employer, there is every possibility of him being blacklisted, and he will not get any good offers. Yes, it is true, and the employers are aware of this, and they know that nobody will go for litigation.

In India, if a small-scale industrialist fails to pay wages, then the Labour Department will come to the site, make a long statement about the duties and responsibilities of the employer, and warn of the consequences of non-payment of salary. If a small-scale industrialist fails to pay the electricity bill, his power will be disconnected. If he supplies a defective article, the consumer redressal forum will direct payment of damages and the replacement of the article. But if the same is committed by an MNC, nothing will happen. I am sure that no privilege has been given to these MNCs with regard to labor laws, but they assume that they have been authorized to dilute the law.

If the employees feel that they are also employees or workmen and not "professionals" as they were until the recession started, they can approach the concerned official of the state/district for help. Regards, Madhu.T.K

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Excellent posting, especially the part where it is true most employees working in MNCs think the labor office and other laws and regulations are only for workmen.

Mr. Javed,

I think Mr. Madhu has replied to your question. Please approach the labor authorities under the Payment of Wages Act, 1936.

J.S. Malik