Is It Legal for Consultancies to Pay Salaries in Cash? Seeking Advice on My Salary Dispute

Hi, ma'am/sir, I am currently working in a consultancy that belongs to my friend. I have been working here for more than a year. They provided me with an offer letter stating a salary of 17k. However, after one year, they are refusing to pay me the agreed-upon salary. They are now suggesting that if I take legal action, they will claim that they paid my salary in cash.

Could you please advise me on whether a consultancy is allowed to pay salaries in cash? Additionally, I would appreciate any suggestions on how to resolve this issue. Your help is greatly appreciated.

Understanding Your Rights Under the Payment of Wages Act

No, they cannot. Your salary is covered under the Payment of Wages Act as it is not greater than 18,000. When they pay your salary, they need to get a signed voucher from you and file a return at the end of the year. I am sure that they have not filed this as most people do not know about it.

Also, you are covered under PF and ESI, so ensure that they have paid this or not. If not, then you have to file an additional complaint with the PF enforcement officer. He will make them pay with an interest of 12% that will be given to you. Also, a complaint will lie with the ESI department.

Additionally, lodge a complaint with the labor department under the Payment of Wages Act. If you are telling the truth, then you have nothing to worry about.

They are simply threatening you in order to avoid paying your salary and nothing more. You may demand outstanding salary in writing, under registered mail, before filing any case.

Difference Between Offer Letter and Appointment Letter

Dear Rajeev,

An offer letter and an appointment letter are two different things. An offer letter is what they have offered to you, whereas an appointment letter is an agreement of service agreed upon by both the employer and employee, accepting the terms thereof.

Please ensure you have all the documentation ready pertaining to your employment.

Non-Payment of Salary

Since your salary is 17K, you are covered under the Payment of Wages Act, 1936. According to Section 4 of the said act, no wage period can be fixed for more than one month, and it should be disbursed within seven days after the closing month if the organization's employee strength is 1,000 or below. However, if the strength is more than 1,000, wages should be disbursed within the 10th day after the closing month.

Send a written application through registered post seeking your dues. If they remain adamant, then you can initiate legal action against them. You can also file the case under Section 33C(2) of the ID Act, 1947, to recover your dues if you are categorized as a workman.

Thanks & Regards,

V SHAKYA
HR & Labour, Corporate Laws Advisor