HR Dilemma: How to Manage Employee Concerns When Salaries Are Delayed by Management?

Good Evening, all respected Members, I would like to seek advice regarding my newly joined startup. I hope I can find a solution from this learned group.

Situation at the Startup

I joined a startup company with approximately 20 employees in Gurgaon in December 2020 as an HR Manager. In January 2021, the director, who has monetary control, is not releasing the employees' salary. He asked me to send an email to employees stating that the salary would be released by 1st March 2021. However, they are now refusing to dispatch the salary. Please suggest how I should handle the employees in this situation. Employees are after me for their salary, and I have no answers.

Thank you for your help and guidance.

Best regards, [Your Name]

Advise the employees to file a claim under section 33C(2) before the Labour Court. Once summons are issued by the Court, the employer will release the salaries of their workers.

Regards, S.K. Mittal

[Phone Number Removed For Privacy-Reasons]

As per the post, the salaries of all employees remain unpaid for the month of January 2021 as of the date of uploading the post. Although the Director, most probably the paymaster of the company, tries to assure that it will be paid on 1st March 2021, the salary for the month of February 2021 also becomes due on 07-03-2021, and it is not certain whether it will be paid on the due date.

Legal Options for Salary Recovery

Filing claims under Section 33-C(1) of the ID Act, 1947 with the appropriate Government or under Section 15 of the PW Act, 1936 before the authority for recovery are the legal options available to the employees. However, the employees cannot repeat the same process every month to recover their salaries.

Role of HR Manager in Crisis

As the HR Manager, the poster in his official capacity should ensure peaceful industrial relations by informing the Director of the consequences affecting the organization's reputation both internally and legally. He should request the Director to take expeditious steps to disburse the pending salary as assured, while also ensuring prompt payment of salaries in the future. It is advisable for him to pacify the employees to bear with the delay instead of advising them to pursue recovery proceedings. Ideally, he should request the Director to address the employees directly through a special meeting to instill confidence in them.

As an integral part of the management, the HR manager is expected to act as a bridge between the employer and the employees during times of crisis like this, ensuring cordial industrial relations.

Dear Friend,

The present crisis in your organization is due to the failure of management, specifically the autocratic nature of the director. Employees will likely approach you regarding the payment of wages rather than the director or other managers. As an HR manager, it is your responsibility to address this situation. Explain to them that the information concerning payment was provided to you as per the director's instructions. The director has now informed that the expected funds from a certain source before 1st March did not materialize. Therefore, the wages can only be disbursed once funds are available, and management is making efforts to secure them. Relay the employees' message to the director that they may resort to legal action for non-payment of wages.

Do not act solely based on verbal instructions. If you do, make sure to mention: "I have been instructed by the director to inform you that the payment will be processed on [specific date]..." Send copies to all department heads and keep the director blind carbon copied (BCC).

Your role in this situation is to postpone payment to a later date when funds are available and to subtly suggest legal action against you instead of directing employees to go against the company. Be diplomatic in your approach and convey that you are not the one withholding their payment under hostage circumstances.

[Phone Number Removed For Privacy-Reasons]

Certainly! Here is the revised version of the user's input with corrections made:

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Salary Payment Issues During and After Lockdown

Frequently, I encounter this type of problem, particularly during and after lockdown. Every employer generally knows that they ought to pay salaries to their employees every month, irrespective of their financial position.

Employer's Refusal or Inability to Pay Salaries

The conclusion point is: Is the employer refusing to pay salaries, or stating their inability to pay salaries due to heavy losses or debts? Accordingly, the workers may choose the labor court for redressal by stopping work in the company or may continue by protesting.

Role of HR in Salary Disputes

Normally, your role is precise: if the employer releases funds, then you will pay with the auditor as usual. If funds are not released without showing believable reasons to anyone, you can't give any assurance to employees. It's better to stay silent. The employees can choose legal remedies. You can advise them to maintain a peaceful atmosphere in the company for better days to come, and not to create a law and order problem or divert to other ways.

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I hope this helps! Let me know if you need any further assistance.