Serving 1 Month Notice And Holding The Salary For The Previous Month As Well

Hi,

I resigned on 2nd December 2016 and am currently serving the one-month notice period as per the company's norms. However, the company is withholding my salary for the month of November as well. Could you please advise if this is correct?

Thanks,
Murari

It is not legally correct to hold the November salary as you have resigned before the release of the salary. Please speak to the concerned HR and try to convince.

Salary Withholding Concerns

If you think that the salary for the month of November has been delayed from the normal routine and has been paid to others except you, then you need to talk to the accounts section to know the reasons.

What it seems to me is that since you have given notice for one month starting from December 2, 2016, they may anticipate that if you leave before the completion of one month, they have the option of adjusting your November salary against the unserved period. It is better to talk to them to understand their perspective.

Regards, BS Kalsi

Hi Murari,

It is not legally correct to withhold your salary for the month of November. However, have you checked with them why you were not paid for November?

Hi,

What is the amount of full and final settlement if I have my EL/PL remaining with the company? Is it decided based on the basic salary or the total salary, as was before leaving?

Logically, I believe it should be the total salary instead of the basic salary because when employees have no leave balance and take leave, the company deducts the full day's salary instead of the basic salary.

Please help me understand which approach is correct according to labor laws.

Thanks,
Murari

Hi,

The company retains one month's salary for Full and Final settlement calculation. This practice is followed at some companies. Please speak to the concerned authority for more clarification on Full and Final settlement.

Regards,
Sapana

Any company holding the previous month's salary to check that the employee completes his/her notice is a wrong practice. The employee has worked for the entire month and is waiting for the salary to pay his/her monthly bills and other liabilities which have been scheduled for.

Holding Back Salary on Resignation

The practice of withholding the previous month's salary upon resignation is wrong and a violation of the Payment of Wages Act. However, it is a common practice. This often happens because employees sometimes abscond after receiving their salary, leaving the company with no leverage or means to recover any losses from the employee.

If you want to raise an issue, you can. There are procedures for doing so. However, it's better to manage your cash flow by other means, complete your clean exit, and leave with a good record to show to the next organization you work for.

Regards, Murari

Holding salary of November is illegal. But since you have already tendered your resignation and serving notice period, it is better to wait for some time to get your full and final settlement and have a smooth exit from the current company as already mentioned by some Ld. forum members herein above.

If the company does not clear your outstanding salary during full and final settlement or any other dues, then you should definitely think about taking legal help.

An employee who absconds after taking the salary will never tender his/her resignation. If the employee tenders resignation with good faith, it has to be honored, and he/she should be paid his/her last month's salary, as per my view.