Is It Legal for Companies to Omit Salary Breakdown Details in Appointment Letters?

I have heard that there are some companies that do not mention the salary breakdown in the appointment letter. Recently, I heard of an incident where the employer asked the HR department to include a clause in the appointment letter stating, "COMPENSATION- Details of the salary breakdown are attached in Annexure 1," without providing the employees with the annexure. Is this practice legal?

No, you got the information wrong. Many companies don't mention the salary breakdown in the offer letter but in the appointment letter. They sometimes might just mention "as discussed" to avoid employees misusing offer letters. However, I feel this practice is silly, stupid, and foolish because tomorrow, either the employer or the employee could take advantage of the "as discussed" clause and manipulate the commitments made during the interview.

I am well aware that many companies do not mention salary in the offer letter. Even we follow that strategy. However, the issue I have mentioned is regarding the appointment letter. This company is writing down the salary in the resume of the employee, which is being maintained in his/her personal file, but they are unwilling to mention it in the appointment letter.

Regards,

I am well aware that many companies do not mention salary in the offer letter. Even we follow that strategy. However, the incident that I have mentioned is regarding the appointment letter. This company is writing down the salary in the resume of the employee, which is being maintained in his/her personal file, but they are unwilling to mention it in the appointment letter.

As far as the appointment letter is concerned, the main letter should mention the basic salary, grade, post, etc., while the detailed salary components are attached as an annexure. Therefore, it is compulsory to include all details in the appointment letter.

Compensation details should be mentioned in the offer letter/employment contract. I didn't get any information about the query from Aparajita.

Legal Implications of Excluding Compensation in Appointment Letters

The query is, if a company is not mentioning the compensation package in the appointment letter, is it doing a legal thing?

Regards

In my view, companies should mention the salary breakup in the employee's appointment letter because the salary breakup facilitates both the employee and the employer in understanding how much of the employee's salary comes under each category. These salary components help employees save on income tax.

Including the salary breakup in the appointment letter removes confusion for the employee and ensures satisfaction on their end.

Regards,
Shikha Gupta

Compensation and benefits are contents of the appointment letter, and the bifurcation of salary is compulsory. It must be mentioned in the appointment letter.

Thanks and regards,
Sumit Kumar Saxena

There is nothing illegal per se in putting a salary breakup in an annex. It's not right and fair to refuse to give it to the employee concerned. But once the employee signs the letter saying he has received the annexure, there is little he can do against the company.

At best, he can complain against the company. Such a complaint will probably arise a year later, when he wants to leave or something. At that time, the complaint will be a waste of time. If he can prove that it was indeed held back, it will be a different matter.

You should instead consider whether it's a good idea to work for such a company.

The general notion is that many companies do provide a salary break-up when the candidate receives their appointment letter. If you are stating that XYZ company has not given any appointment letter, then no legal action can be taken against them, as per my knowledge, because it may be an internal policy of that XYZ company.

Regards,
Derek Gomes

Is It Legal to Omit Salary Breakdown in Appointment Letters?

Hello, I have heard that there are some companies that do not mention the salary breakup in the appointment letter. Recently, I heard of an incident where the employer asked the HR department to include a clause in the appointment letter that states, "COMPENSATION- Details of the salary breakdown are attached in Annexure 1." However, they did not provide the employees with the annexure. Is this practice legal?

Dear Aparajita, In many companies, it is a common practice for the offer letter to only confirm the selection of the candidate for the position and specify the tentative date of the candidate's joining. The Appointment Letter holds a legal identity as it outlines the terms of employment for the employee. These terms are binding for both the employer and the employee. Any violation of the employment terms stated in the appointment letter can be challenged in a court of law. Therefore, if a company specifies the salary breakdown in the appointment letter but does not provide it to the employee, it is illegal and can have a significantly negative impact on the company's reputation among its employees.

Best regards,
Dinesh Shitole, Pune

How could an employment contract be complete without mentioning all terms and conditions?

I have a question regarding the salary breakup. Can the salary breakup be included in the contract letter as well? Kindly revert back as soon as possible.

Regards