Salary Cycle Change: Are We Risking Legal Issues by Paying for 25 Days in the First Month?

Salary Process Adjustment Proposal

This is regarding the Salary Process in my company. We adhere to taking a few steps to improve the regular process.

Our current attendance cycle is from the 1st to the 30th of the month. However, due to our attendance maintenance at remote sites, we have not been able to collect all the details related to attendance and other reimbursements by the end of the month. This delay has resulted in the salary being delayed from the 7th of the month until the 10th or 12th of the month. Therefore, we propose considering the attendance from the 26th of the preceding month to the 25th of the current month, with the salary to be released on the 7th day of every month.

Since we are implementing this change starting with next month's salary, the staff will receive the salary for 25 days in the first month, and from the following month onwards, the attendance cycle will be maintained from the 26th of the previous month to the 25th of the current month.

In this case, please advise if we may be breaching any laws, such as labor laws or minimum wages, by paying 25 days' salary to staff in the first month, or if this can be done at the discretion of the management.

I would appreciate your esteemed suggestions.

Looking forward to your response.

Regards

If for the first month you are paying a salary for 25 days, then in the next month, pay the salary for an additional 5 days as arrears.

No, you are wrong in your approach. Under the requirements of the Payment of Wages Act, you are required to pay salary for the calendar month. You cannot decide wage periods at your discretion. At the same time, payment of salary should be made by the 7th of the next month (10th for companies with more than 1000 employees in a particular establishment).

What you can do is to go ahead and consider attendance until the 25th and assume that people will be present during the remaining working days of the calendar month. If someone is absent, then you can deduct the excess amount from the salary of the next month.

I agree with Mr. Banerjee's views. You should pay for the full calendar month by the due date. However, any adjustment, if necessary, can be made during the next month's payment. Special cases such as new joiners or those who have resigned may be paid after receiving the full report, and the attendance site may be directed to send the report immediately to decide on the payment of salary/wages.

In this way, in my opinion, there will be no violation of the law. Employees should be paid on or before the due date.

Regards