Is It Legal to Stop Paying Rent and Deduct Room Advances from Employee Salaries?

Dear Experts, I request your kind suggestions on the issue below. Initially, we provided accommodation for a few employees based on their requests. However, due to a severe financial crisis, management has decided to withdraw this facility. We have already given the concerned employees a 2-month prior intimation through verbal communication, notice board announcements, and registered post. Despite this, when we asked the employees to vacate the rooms, they refused. In light of this situation, we have decided to cease paying the rent and deduct the room advance amount from their salaries.

Could you please advise if this course of action is lawful? Your valuable inputs would be greatly appreciated.

Regards,
Deepan R

Attribution: https://www.citehr.com/member.php?u=...#ixzz334iE5nZH

The decision on what fringe benefits to provide, to whom, for how long, etc., lies with the management. When the business environment was favorable, you had granted these benefits. There is nothing inherently wrong if you wish to withdraw these benefits. Additionally, you have given ample notice regarding the withdrawal of these benefits. Hence, your company cannot be faulted in this regard.

How many employees are utilizing company-provided accommodation? Why were the letters sent via registered post? Why weren't the letters issued personally?

At this point, you may issue individual letters outlining the company's next steps. Ensure to obtain the individual's signature on the duplicate copy. The letter should be signed by the General Manager, Vice President, or Managing Director. If an employee refuses to accept the letter, consider placing that employee under suspension.

Thanks,

Dinesh Divekar

I echo Dinesh. The benefit that was offered must have had a clause that mentioned how it can be revoked. The rules for eviction must have been mentioned there, which the employees signed before they took possession. Please read the document. Issue letters with the guidelines. If possible, get an advisor to proofread before you have your employees sign them.

Our experts can help you if you can upload the content. Please handle the communication very carefully.

Do think of the employees as well. If you are asking them to shift, have you found any options for them where they can live and afford the place? They are at work all the time, hence may not be able to home-hunt.

Please offer them the best assistance. You will need them to remain productive and not be disgruntled at work. If they have to shift far away from the location, offer a different timing in case you cannot provide any transportation.

This is a transition period for them. Please remain patient.

This might sound fictitious now, but partner a turnaround to your company with them. Take them along as you progress, and you will build a stronger team.

Wishing you all the best!

Thank you for your valuable advice. A total of 11 employees have been provided accommodation. The reason for sending this intimation via Registered Post is that the employees did not accept it when it was distributed in person.

Once again, I appreciate your suggestion.

Warm Regards,
Deepan R