Understanding Wages vs Salary: What Happens When Paychecks Are Delayed?

1) Please explain the difference between wages and salary.

2) If the salary of an employee is not paid for two months, what penalties can the employer face?

3) If an establishment is based in city X (for example, if the headquarters/corporate office is in Bangalore) and has offices in cities A, B, and C (such as Delhi, Mumbai, Chennai), can an employee working in the Delhi office file a case against their employer in the Delhi labor court for non-payment of salary for more than one month?

Regards,
Ruchi

Dear,

There is no difference between wages and salary. We have only created these two words. If an employee does not receive wages/salary for two months, then a case can be filed with the labor commissioner under the Payment of Wages Act Section 15(3). There is a provision for a ten times penalty. In your case, you can file a case in Delhi itself.

Thank you.
J. S. Malik

Dear Ruchi,

We use the term "wage" for workers/employees, while "salary" is used for staff.

If an employer fails to pay the salary for two months to any worker/employee, and they are entitled to relief under the Payment of Wages Act, 1936, they can file a complaint with the area labor inspector. If the complaint is not resolved, they can file a claim before the Authority under the Payment of Wages Act of the area. The worker can also directly file this claim. A ten-time penalty can be awarded if illegal deductions are proven, but in cases of non/delayed payment of wages, this ten-time compensation is not awarded. For delayed wages, this compensation is up to Rs. 3000/- but not less than Rs. 1500/-.

A claim case must be filed before the Authority of the area where the employee has worked.

Regards,
R.N. Khola

(Labour Law & Legal Consultants)
09810405361

Dear,

Practically, if you were to ask me, there is no difference. These are the names which we have given from time to time. If you go back to the seventies, there was no personnel manager or HR manager. Companies used to refer to this role as a labor officer. Then, the trend changed, and the name was altered to personnel manager. Subsequently, almost all companies started using the title HR manager for this role. This position is prevalent in India.

Of course, theoretically, there is a difference. HR managers should be entirely responsible for employee development activities, whereas personnel managers should handle routine work.

Thank you,
J. S. Malik

Dear Ruchi,

Normally, wages denote remuneration paid to workers/labor. Salary is remuneration paid to staff. An employee can file an application for unpaid wages/salary with the concerned Labor Office under the Payment of Wages Act. A monthly paid employee should receive their remuneration within 7 days of the last working day of the previous month. However, the Labor Department can only entertain this application if the employee is covered under the wages limit prescribed by the Act.

Thanks & Regards

Penalties Under the Payment of Wages Act

As per the Payment of Wages Act, under Section 15, the penalty to which an employer is liable includes refunding the employed person the amount deducted or the payment of the delayed wages. Additionally, the employer must make the payment of such compensation as the authority may deem appropriate, not exceeding ten times the amount deducted.

Regards

Understanding Wages and Salary

Wages are best associated with employee compensation based on the number of hours worked multiplied by an hourly rate of pay. Salary, on the other hand, is best associated with employee compensation quoted on an annual basis.