Feeling Stuck with a Salary Increment? Can You Legally Refuse It?

I am dissatisfied with my increment and have already informed HR of my non-acceptance through email. Following this, I also had a discussion with HR, but it was inconclusive. I do not want to accept the incremented salary. Kindly let me know the procedure. Is there a law or policy that obligates employees to accept the amount offered in the name of an increment?

There is no law or policy for a threshold slab for an increment unless you fall under the ID Act, which also involves a union. Assuming you are a part of a private organization, you can get this clarified by speaking with the HR department in your organization.

This is in addition to what Mahesh has written. He has provided a reply from the legal viewpoint. Let me present my views from the perspective of performance, financial well-being of the company, organizational politics, etc.

You are not satisfied with the quantum of increment given to you. For this, you would lodge your protest by refusing the increment. But then, what would be the next logical step? What if your employer accepts your refusal and maintains the status quo?

When employers do not increase the salary by way of an annual increment, two interpretations can be made. One is that your company may not be doing well. In that case, has the annual raise been withheld for others too? If yes, your refusal has less meaning. Many times, employees are taken into confidence as to why the annual increments are not given or are given in low quantum. This openness or timely communication mitigates the dissatisfaction of the employees, a bout of which you are passing through.

The second interpretation is whether the company is doing financially well or not, but others received a decent salary increment while you received a minuscule percentage. In such a scenario, the company has sent a signal to you about your position in their eyes.

Annual increments are linked to performance as well. What was the level of your performance? Did your manager give some negative remarks? Did you commit some grave mistake in the past because of which your existence came under scrutiny?

Is a lesser salary increment a way to create ground for your exit? Is it a ploy to frustrate you so that you quit the company on your own? Was your HOD instrumental in ensuring that you get the least raise?

There are so many questions associated with your post. Please clarify.

Thanks,

Dinesh Divekar

Understanding Salary Increments and Your Options

There is no law governing increments. Also, there is no law that says an employer must give you a satisfactory increment, or even any increment, as long as your salary is above the minimum wage. If you refuse to accept the increment, HR may still add it to your salary and consider it for salary transfer. You have no choice then because it will be considered in your income tax returns.

The other move by HR (since it's now clear they are not going to increase your increment) is to continue paying your old salary. You are then more the loser. If you are not happy with your increment and your employer is not willing to increase it, then the option for you is to leave and find another job (or more correctly, find another job and leave).

Factors Influencing Periodical Increments

Rightly said by all the contributors, periodical increments always depend upon various factors like discipline, hard work, sincerity, loyalty, work command, and above all, the financial capability of the organization. It is not a legal right unless there is a written agreement under the Industrial Disputes Act. One can raise their protest before the concerned official, but ultimately, no legal remedy is available. Moreover, by protesting, you may also lose confidence, which could be harmful in the future.

Regards, P K Sharma

Views on Increment Dissatisfaction and Refusal

Believe it or not, nowadays every venture is a cooperative venture, not just an industrial establishment, factory, or company focused solely on serving and earning. This concept has been accepted by all of us, I understand, in the right spirit to minimize costs and extravagant utilization of money, time, skills, and resources, and to maximize attention towards optimal utilization of all types of resources, product quality, quality of employee satisfaction, employee engagement, exceeding customer expectations, and overall stockholders' business interests. I understand that most progressive organizations believe in and practice this ideology, and an organization, of course, includes its employees—all and each, as well.

On the other side of the coin, sharing and caring, listening to others' views, problem-solving, and readiness to accept situations and decisions—even if one may not ideally agree or be a part of it—individual performance, integrity towards the organization, and faith in the superior's viewpoint, etc., are essential influencing factors at the management level that we all refer to as wisdom and professional acumen!

Making sincere efforts to understand differences and their causes with an open mind and heart, and trying to bring about amicable end results under the umbrella of mutual preventive measures, changing behavior, etc., is an appreciable but essential attitude on both sides. This process takes time as it cannot be done overnight.

Furthermore, one may present their self-appraisal with quantifiable details and information on achieved as well as desired results and individual contributions to that effect. This should be based on facts and presented to higher authorities, with a copy to immediate and next superiors, requesting them to entertain the representation and consider it for at least a review, positively.

In the meantime, any appreciation that has been awarded should be honored as a gesture of being a good and humble employee, I understand.

Thanks with sincere regards,

Devdatta Yagnik

NARMADA BIO-CHEM LIMITED.

M: [Phone Number Removed For Privacy Reasons]

It's good to know you are working in a company that considers itself a "co-operative venture." Of course, all of what you said is most correct in an ideal situation. Most people are not in that situation. It would be a good world if every employer were following that practice.

If you read the original post, the poster is asking if it is legally binding for them to accept the increment. Not all employees understand what they are worth. Many are misguided by the fact that someone else got more or think the company makes so much profit only because they are there. In reality, there are a number of factors, and the employer may not feel you are the reason, which is why they would be willing to pay only a specific amount to you.

The poster has already protested and submitted their reasoning for why they should get more. "Discussion with HR but it was non-conclusive" means HR does not agree with their contention. So what option do they have?

Your last statement gives the answer to the situation. Be humble and accept what is offered as recognition. Or, of course, as I have said, if you are not happy, vote with your feet—find another job where you are going to get what you want, and leave.

That is my understanding of the matter.

What I do at my company is receive an annual increment of Rs. 156 and Rs. 13 per month, along with 0.12% of the total CTC.

What is your total salary? Are you paid minimum wages or well above the minimum wages? What is your designation? Is this meager increase given to all others, or are you singled out? Why is your hike so low? What is your opinion?

As stated in my first post, employers resort to such tactics to humiliate unwanted employees. Unable to face the brunt of humiliation, employees put in their papers. Voluntary resignation suits employers.

Please provide more information about your query.

Thanks,
Dinesh Divekar

No law regulates the grant of increments. It is based on individual performance. Your refusal to accept your increment does not result in any loss for the company, as your decision has no relevance to the company. However, it does express your grievance regarding the insufficient amount of increment. It is essential to determine if other employees have also received increments following the same pattern or if it's only your case. Additionally, you have not mentioned the rating of your self-appraisal by your supervisors or your discussions with them on this matter. Therefore, it is challenging to determine whether your refusal is justified.

Nevertheless, your refusal to accept the increment signifies your dignity. The company may or may not increase the increment amount. Maintain this spirit, but ensure that your efficiency does not decrease solely due to this increment issue. This approach may help preserve your dignity within the company.

Rajan,

I think the writing is pretty clear. The Company does not think you are worth retaining, or it thinks you are overpaid today. If you can find another job paying significantly better, proceed.

Increment Issues and Employee Dissatisfaction

Many seniors have already shared their comments on this matter. Actually, the same problem occurred in our company, and one of the engineers resigned because of this issue. He was not satisfied with the increment amount and decided to leave rather than continue.

An increment is based on the annual performance of an employee; it entirely depends on the appraisal report. You can't challenge that. All you can do is switch your job and find a new opportunity.

With regards,