There is no specific period of limitation for suspending an employee pending enquiry, unless otherwise, mentioned in the service rules, standing orders, conduct rules or terms of contract applicable to him.
In certain State Acts like Kerala Cooperative Societies Act 1969, no employee can be suspended more than one year at a time without the prior and express approval of the Registrar of Coop. Societies.
Since the purpose of suspending an employee is to conduct enquiry into the charges levelled against the employee, no time limit can be prescribed, since the enquiry has to be completed adhering to principles of Natural Justice. Generally suspension is done when the charges are of serious in nature, which may lead to awarding major punishment, after conduct of enquiry.
An employee under suspension is entitled for Subsistence Allowance which is 50% for first ninety days and 75% after 90 days as per Section 10A of the IE(SO) Act 1946.
Some States prescribe a higher subsistence allowance. For example under Kerala Payment of Subsistence Allowance Act 1973, and Tamil Nadu Payment of Subsistence Allowance Act 1981, after 180 days, the employee under suspension is entitled to get 100% of wages as subsistence allowance. In Karnataka Payment of Subsistence Allowance Act 1988 (wef 1992) is 90% after 180 days. I am not familiar with similar State Acts in other States.
It is always in the interest of the employer to conduct the enquiry and complete the process as early as possible, as subsistence allowance once paid cannot be recovered in any case and in case of reinstatement revoking suspension, the salary/wages in full, after deducting the subsistence allowance paid, is to be paid.
Now decide how long you want to suspend an employee ?
K C S Kutty