Is It Fair for My Company to Hold Two Months' Salary During My Notice Period?

Respected All,

I have resigned as per company policy and given a one-month notice period, but the company is holding my two months' salary for June and July.

Resignation Details

Resigned Date: 1st July 2014
Last Working Day: 30th July 2014

As of today, I have completed 21 days of my notice period, but the company is holding my June salary, saying it will be cleared in the full and final settlement. As per my knowledge, the company can only hold the notice period salary, and they are supposed to pay me the June salary. Please suggest.

Regards,
Ankush Patel.

Yes, ethically and professionally, the employer has to pay you the salary within 7 days. Any other claim can be settled on FNF, i.e., within 30 days of his/her last working day. However, most companies hold the salary to penalize the employee for reasons best known to the HR of the said company.

I would like to request that you send a letter to your HR Head, duly acknowledged, to release the June salary as you have commitments to fulfill.

It is quite normal to hold the salary as soon as you serve the resignation notice and settle the same along with the Full and Final (FnF) settlement.

Pon

It is actually logical, though not allowed as such under the act. The employee needs to serve the notice period. If he does not, then the employee should pay the notice pay. The chance of recovery from the employee is close to nil. So the company chooses to hold back the previous month's salary so that they have something to recover the notice pay from. Also, they know that holding back the previous month's salary ensures that the employee will complete his terms of employment, including his notice period. Though the act does not allow delay in the payment of wages/salaries, the original poster cannot do anything about it. If he tries to take a legal stand, his relieving letter and BGV will be in danger.

Dear all,

Legally, an employee is entitled to receive their wages/salary within seven days from the closing of the wage period. Failing to do so may result in action under the Payment of Wages Act being initiated by the area Labour Inspector/Officer if the lapse is brought to their notice through a simple application. The punishment, in practice, is minor for a company, just Rs. 1000 for the first offense.

The employer might have held the salary just to harass the employee and keep them under their control until the day of departure.

Regards,
P.K. Sharma