Salary Delays: How Can We Legally Address Late Payments in Our Company?

Salary Payment Concerns and Legal Obligations

Management is giving the least preference to salary in our company. The company has a practice of paying salaries between the 17th and 25th of the succeeding month. There is no financial problem in the company.

Legally, how should one handle this type of situation, or where should one notify this type of problem under statutory obligations?

Suggestions needed.

Regards

Addressing Salary Delays in Management

Is there anyone in the management team who can listen to you and find you a resolution? Ideally, when salaries are altered or delayed, there should be formal communication by HR. Please talk openly with the concerned HR or authority. Observe the situation from both the employee's and employer's perspectives. Approaching the labor commissioner's office would be your last resort, where you need to address the damages on a far bigger scale.

There is nobody to take a step forward for this type of grievance. In this situation, how should it be tackled? A person who comes forward may become a target in the atmosphere. So, the best method to tackle this is by statutory law. The only thing is how to follow the steps silently and ensure it is beneficial to all. Courage is required to make them understand that statutory law must be followed.

Please advise.

Regards,
MK Verma

First of all, check the wage month to determine if it encompasses the 1st to the last day of the month or a different period. According to the Payment of Wages Act, 1936, wages must be paid within 7 days if the number of employees is less than a thousand. If the number of employees exceeds a thousand, the maximum timeframe extends to 10 days after the end of the wage month (Section 5).

In the event of a delay beyond these specified periods, the local Labour Inspector is empowered to initiate proceedings under the Act. Therefore, it is advisable to contact the local inspector for further assistance.

Regards,
KK Nair

The wage month is from the 1st to the last day of the month. If the number of employees is less than 1000, the delay in wage payment should be communicated in writing to the Labour Inspector for authentication. Alternatively, it can be communicated verbally.

Regards,
MK Verma

Mr. Verma, there is nothing like a verbal complaint recognized under any labor law; everything needs to be in writing only. However, complaint or no complaint, my advice to you is to look out for a job change. Delay in salaries is the first sign of a company going down the drain (please refer to the Kingfisher case). Even if you say there is no financial crunch in the company, you are definitely not in a very professional company that will care about employees.

The complaint could be oral to the Inspector. It is for the inspector to act in this matter, for which a complaint is not necessary. He can suo motu take action too. Looking at the apprehension you had expressed earlier of possible victimization, the Labour Inspector could be informed orally and requested to intervene. However, if the same could be given in writing (Union can do this), then further action is bound to happen.

Regards

Thank you for your valuable advice. There is no union in the company. Finally, the answer is that this type of situation will be dealt with by the Labour Department.

Regards,
MK Verma

Salary Limit and the Payment of Wages Act

If the employee's salary is above Rs. 18,000 per month, then the Payment of Wages (POW) Act is not applicable, and labor officers cannot take any legal action. This is a problem in India unless the salary limit under the POW Act is removed. If so, all employees will benefit. The cited problem is widespread in many industries.

Regards,
Varghese Mathew
[Phone Number Removed For Privacy Reasons]

I am working in a central government limited company in an oligopoly where only four to five companies exist. Many of you might have guessed my company's identity since it is very much in the news for a mountain of losses, debts, and defaults on payments to vendors and suppliers. We are receiving our salaries almost one month behind schedule, and that too only a percentage of it. They do not mention when we will receive the balance or if we will receive it at all. If this is the state of affairs in a government concern, imagine where you stand in getting your grievances solved!

Thank you.