Employer Withholding Salary Before and During Notice Period: Is This Legal and How Can I Fight It?

My current employer is refusing to pay my salary for the month before I resigned and is refusing to pay any salary during the notice period as well. Is this legal? How do I contest such claims?

Dear Daniel Radcliffe,

Separation from the company and salary disbursement

Separation from the company and disbursement of the monthly salary are two independent things. Why these are being clubbed by your employer is not understood. Withholding the disbursement of salary without a valid reason is illegal under the provisions of the Payment of Wages Act. It is also illegal under the provisions of the Factory Act or Shops and Establishment Act, as applicable to your company.

Steps to address the issue

You may write an application to the MD of your company asking for the release of the salary. In the application, do not write anything about the illegality of withholding the salary, but write that you have domestic commitments, and without the monthly salary, it will be difficult to meet them.

Filing a complaint with the labor office

If the MD remains impervious to your pleas, then you file a complaint with the labor office in your area. However, only a "workman" can file a complaint in the labor office. In simple words, you cannot be a supervisor, or you should not have any subordinates.

Considering legal assistance

Nevertheless, if you have sufficient financial resources, then you may wait until your exit from the company. Your smooth discharge and obtaining an unblemished relieving letter are important to you. If you file a complaint with the labor office, your employer may get upset and may hinder your employment. However, after your exit, you may seek assistance from a lawyer.

Maintaining composure

Finally, regarding your exasperation, nothing is as frustrating as working without a salary. Nevertheless, while dealing with the MD or other company officials, do not lose your composure. Remain polite and do not let your emotions take over. One misstep and it could work against you.

All the best!

Dinesh Divekar

They are now claiming to reimburse my salary (meant to be paid during the notice period) after 30-60 days from the last working day.

How do I trust them at this point? They are not even following the employment agreement/contract signed. What if they withhold my experience letter and relieving letter at a later date?

Please suggest something for this predicament.

Thanks

Dear Daniel,

Sometimes, at the time of exit, employees tamper with data or unleash their destructive tendencies. It appears that your employer had trusted the exiting employees, and the trust was shattered because of their destructive activities. Now the employer has imposed, though illegal, a blanket ban on the disbursement of salary and wages.

If they are saying that they will reimburse your salary after 30-60 days of your exit, have they given anything in writing to you? In fact, all dues should be cleared on the Last Working Day (LWD) itself. Nevertheless, due to administrative difficulties, many companies clear the dues in 1-2 weeks or along with the monthly salary.

I have previously mentioned that the actions of your employer are illegal. Whether to approach the labor office and file a complaint or not is your decision.

By the way, what is the nature of your industry? In my earlier post, I had asked whether you are a "workman" or a "supervisor"? The reply to this question is also pending.

Thanks,

Dinesh Divekar

Hi Dinesh Divekar ji, by the way, what is the nature of your industry? I work in the IT industry. No, I'm not a supervisor; I have a reporting manager/project manager above me in the hierarchy, so I should be classified as a workman.

The company doesn't provide any items (laptop/desktop) or services to its employees; they cannot really be 'destructive' in any real capacity. We have been using our own machines, paid for by our own money. They do not invest in any training or computer hardware for employees either.

If they are saying that they will reimburse your salary after 30-60 days of your exit, have they given anything in writing to you? No, they have not provided me any written contractual agreement of the same, hence my distrust. Considering they don't even follow their own employment agreement, I am not sure if I should be trusting them. They are withholding the complete salary for the duration of the notice period.

Honestly speaking, I am quite surprised by their hostility and lack of adherence to their own contract.

What do you think about "bonds" in such scenarios?

Do they have a legal stand or justification? Such companies often enforce bonds to prevent people from leaving such a workplace. Which act governs such cases?

I lack the knowledge and guidance to seek legal recourse. Sad.

Thanks in advance.