Is It Legal for My Employer to Demand a Bonus Refund and Withhold My Salary?

As per my new employer's appointment letter dated 2020, I was not entitled to any other benefits apart from the monthly salary. Is it legal to deny benefits?

I received an annual salary increment in both 2021 and 2022. Similarly, during the Durga Puja festival in both years, I received an amount nearly equivalent to my monthly salary. I mentioned this in 2021 to my reporting boss, who said it was a Puja bonus; all communications were done verbally.

Now, my employer (not the reporting boss) has claimed that both bonuses were credited by mistake and has asked me to refund them, either by installments or in full. The reporting boss is not supporting me either. Moreover, since I did not make any documented confirmation, they refused to pay my previous month's salary by adjusting it against the bonus.

Are they legally allowed to ask for a refund or adjust it against my salary without my consent?

Hi, This is not the right practice. Even if the amount is credited wrongly to your account, for argument's sake, recovering it after one year against salary is ridiculous. You can raise a dispute with the Labor Officer of your jurisdiction.

It appears to me that the organization is a non-professional organization. As informed to you, both the bonuses have been credited to your account by mistake, which indicates that you were not eligible for a bonus in 2021 and 2022. This could only occur if your salary for 2020 (Basic & DA) was more than 21,000/- per month, probably the same for 2021. Bonus is considered deferred wages, so in 2021, you were eligible for the 2020 bonus, and in 2022, you were eligible for the 2021 bonus.

Even though you have been paid one month's equivalent salary as a bonus for both years, this is not in accordance with the Payment of Bonus Act.

Now, regarding the recovery of any extra payment, the way the organization has deducted it is not legal. If you are not a management staff member, you may approach the appropriate authority for the redressal of your grievance.

Regards, S K Bandyopadhyay (WB, Howrah) CEO - USD HR Solutions [Phone Number Removed For Privacy-Reasons] [Email Removed For Privacy Reasons] USD HR Solutions – To strive towards excellence with effort and integrity.

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My salary started at Rs 17,280 per month in 2020, and after subsequent annual increments, it was Rs 18,000 per month as of October 2022. It is below Rs 21,000 per month. The organization is a private limited company. Unfortunately, I have heard that organizations with fewer than 15 employees are exempted from maintaining labor laws. I am not entitled to receive any paid leaves or PF as per my appointment letter. It was a difficult time during the lockdown, and I had to accept whatever opportunity I got (I had just resigned from my previous company before the lockdown). Which Authority Can I Approach? If the organization is exempted from maintaining proper laws, which authority can I approach?

I think I need to step in here and clarify.

Maintaining labor laws

No one is exempt from "maintaining labor laws." I assume you mean following or adhering to, not maintaining.

Exemptions for small companies

Companies with fewer than 20 employees are exempt from maintaining standard registers. Instead, they have to maintain certain combined registers that provide the necessary information without the burden of complex compliance.

Protection under labor laws

You are still entitled to the protection of labor laws. They are exempt from PF since the number is less than 20, but they cannot deny paid leaves as it is covered under both the Factory Act and the Shop and Establishment Act.

Approaching authorities

You can approach the relevant authorities for help, but I hope you realize that in such a case, you will most probably lose your job. You need to make a strategic decision, but I suggest you find another job as this is a bad company to work for.

I have already resigned. Still, I am attaching my appointment letter, hiding the name of the organization, signatures, and stamps. I joined during the lockdown, and at that time, it was the only option for me. I had verbally requested several times to review and grant me paid leaves other than Sundays or National Holidays, but in vain. From the attached letter, is it possible to mention in which cases they are at fault?

The company's terms are illegal. You cannot have a person working without paid leave as required under the relevant acts.

Your salary is below the limit specified in the Payment of Wages Act, and therefore you are entitled to protection and assistance from the Labour Commissioner of the relevant area.