Is Your Company Skipping Salary Hikes? Understanding Your Rights in India

Mandatory Salary Increase in Indian Private Companies

Is there a mandatory salary increase according to Indian law in private companies? My friend's company has not provided a salary hike for the past one and a half years. Do they hold any legal rights to protest against the company? If so, how can they proceed in raising their concerns about a salary hike?

Indian labor laws are meant for employees working in India, whether they are white-collar or blue-collar employees. If your friend is working as a blue-collar employee, then as per the law, there should be a hike in the employee's salary. If there is no hike, the employee has the right to take legal action against the company. Every six months, there is an increase in DA (declared by the labor commissioner's office) for blue-collar workers and annual appraisals.

If your friend is working as a white-collar employee, then the annual appraisal process depends on and takes place as per the company's policy. If the company is facing any loss or does not have sufficient funds, then the management has the right to skip the appraisal process for that particular year.

In public sector services, there is a provision for annual increments and also schemes for assured promotion for central government employees. These provisions are available to all and enforceable against the government. It is felt that in the private sector, especially in white-collar jobs, even when the company is profitable and the employee's performance is excellent, management often refuses to increase salaries or provide increments for 2-3 years or more.

Although the Minimum Wages Act exists, I believe it may not be applicable in the aforementioned circumstances. Therefore, the question arises: Are there any labor laws that enable white-collar employees in the private sector to take legal action against their employer and demand yearly increments or pay raises?

Thank you.