Is It Legal to Deduct Pay for Missing Deadlines? Seeking Advice on Proposed Rule

I am the HR of a company. We are facing a huge problem with certain employees not completing work within the assigned deadlines and taking too many extra days to complete it.

Proposed Salary Deduction Rule

We are considering implementing a rule to deduct salary on a pro-rata basis for each extra day a person works beyond a missed deadline. Is this legal? We will inform the employees at the start of the month about the rules and deadlines, and tasks are always clearly mentioned.

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Addressing Job Completion Issues

Coming to your question, if the job is standalone and purely individual-based with some demonstrated evidence of completing the job within a specified time, then you can consider and communicate first to employees about the proposed action for non-completion of the assigned jobs on time or procrastinating to complete delay.

Considerations for Wage Deductions

If the job is not in the individual's full control, then it is unfair for the deduction of wages on a pro-rata basis.

Manufacturing Organizations and Standard Man-Hours

If it's a manufacturing organization, it is possible to provide a standard man-hour for completing each job; otherwise, it is difficult.

Legal Considerations

Legally, if you have certified standing orders for the organization, you can take action based on the clauses provided therein. Otherwise, your offer of appointment should have the clause for the deduction of wages for non-completion of assigned jobs within the specified time.

Hi, you cannot blindly deduct salary just like that.

Analyzing the reasons for delayed work completion

"Certain employees are not completing work within the assigned deadlines and taking way too many extra days to complete the same." What is the quantum of work assigned, and how did you arrive at the deadline for completion of assigned work? Additional time taken by those employees may be due to their incompetency, lack of training, high volume of work assigned, act of procrastination, or lack of infrastructure. Have you analyzed the above? Without analyzing the reasons and directly implementing pro-rata salary deductions, it will have an adverse impact. Moreover, it won't be legal. So, find out the root cause first, the actual reasons behind the delayed completion of work.

Payment Deductions and Employee Motivation

A person who is on a monthly salary is to be paid for their time. Therefore, you are not allowed to deduct salary for any reason other than absence from work, or what is allowed under Sections 6 and 7 of the Payment of Wages Act.

Your proposal is unreasonable. If I were the employee, I would simply not bother to show up for work if I am not getting paid for it. If you really have a problem with this, at best you can offer a bonus to those who complete the work within the deadline.