Navigating Salary Payment Challenges: How to Legally Pay an Ex-Employee Without a Bank Account?

Dear All,

I'm Harshal, working with a top-tier consulting firm in Bangalore in the HR department. I would like to discuss an issue and seek suggestions on the same.

A candidate joined us at the end of November and, due to an unavoidable reason, had to quit by mid-December. We paid the November salary for 5 days in cash at the beginning of December since the candidate's salary bank account was not yet opened. When the candidate resigned, we assured them that the remaining salary for the month would be paid by mid-January.

Currently, we are issuing the remaining salary by cheque. However, the candidate has mentioned that she does not have an active bank account and prefers to receive the salary in cash. Additionally, our payroll process is managed by the corporate office located in Delhi.

In this situation, what are our options from a legal standpoint for both the company and the candidate?

Thank you.

Dear,

As per the Payment of Wages Act, all salaries are to be paid in cash. However, with the consent of the employee, payment can be made through a cheque.

Thanks,
J. S. Malik

Harshal,

You can give her a bearer cheque that is equivalent to cash. She can then go and withdraw the cash from the bank since it is not an account payee cheque.

- Payal

I agree with Payal. Either you can give a bearer cheque, or you have to pay in cash. As per the law, the company has to pay the salary in cash only.

Dear Harshal,

Don't worry. Please ask her to open an account and give her a cheque personally or by courier with details of her salary.

Regards,