Salary Delays Due to Audits: How Should Management Communicate with Employees?

Salary Payment Delays and Communication Concerns

Hello to all HR Professionals & Experts,

I need your advice and views on the following points:

Usually, salaries are paid by the 10th of every month, but this month our management was out of the station, and no alternate arrangements were made to release the salaries. Furthermore, when staff inquired, everyone was told that as audits were going on, salaries would be delayed. (No auditor was seen in the office.)

Today, being the 23rd of the month, management is back, and no auditor is seen. Everyone has started questioning about salaries. Furthermore, on this day, management asks to put down the circular regarding Internal & External Audit for the next 30 days and states that no salaries and payments will be done.

I want to know if this is the correct way of communicating to the team, with no assurance if both months' payments will be done together.

Please advise on the same.

Dear Sadaf,

Kindly remember that salary is a statutory right of each and every employee. Their family depends on it. How can anyone stop it? It can lead to a very ugly legal situation.

Whatever is happening in your organization is purely wrong on legal as well as humanitarian grounds. Your employees have full rights to go to the labor office and complain about the same. The situation may get worse if any political party gets involved in this matter along with their union. Thus, you need to take care of the situation and pay the dues at the earliest. An audit can never be the reason for a delay in payment.

If your establishment employs more than 1,000 employees, the salary should be disbursed on or before the 10th of the succeeding month. If you employ fewer than 1,000 employees, the salary should be paid on or before the 7th of the month, as per the Payment of Wages Act, 1936. The excuse of internal/external audit is not legally tenable. As the HR manager, you must inform your employer about this without any further delay. Furthermore, all your statutory payments will also get delayed, warranting interest, penalty, notices, etc.