Can My Employer Withhold My Basic Salary If I Miss Targets? Seeking Legal Advice

Hi, my name is Rishabh. My previous employer, Hbj Capital, is a stock advisory firm. The work there was based on targets, which used to give me a basic salary of $12,500 and a variable salary depending on my achievement in reaching the targets. My question is, if I am unable to achieve the target, will I still be eligible for my basic salary as I worked for the entire month but couldn't reach the target? Now, after leaving the company, my employer has refused to pay me my basic salary. Is there any law that addresses my situation? Kindly help.

Understanding Basic and Variable Pay in Employment Contracts

Every company has started fixing a basic pay and a variable pay depending on the target. This is the tactic adopted by companies nowadays.

As long as you receive your basic pay, then it is in order. Since your variable salary is based on the target, you will be considered for a variable salary according to the target achieved by you as per the terms and conditions of your appointment order.

However, they cannot stop your basic salary on any account unless there is a clause to that effect in the terms and conditions of your appointment letter stating that the basic pay depends on achieving the target, etc.

Generally, whenever there is a basic salary as a fixed component and a variable component based on the achievement of targets, the basic salary is paid regardless of the level of target achievement, and the variable component depends on the percentage of the target level achieved. However, you need to refer to the letter of appointment to determine if any conditions are specified even for the basic salary. Please carefully review your terms and conditions of appointment to fully understand them. If you believe you are entitled to the basic salary and your employer refuses to pay, you may seek redress by contacting the Labour Commissioner of the State.

Best of luck.