Salary Payment Timing with Account Payee Cheques: How Urgent Is This Issue for You?

Dear all members of the forum,

Very Happy New Year! I have a small problem regarding the date of payment of salary in the case of an Account Payee cheque. Please treat this as very urgent.

Regards,
Amit Kumar Garg

Dear Mr. Amit Kumar Garg,

What is your organization's policy? In case you want to send salaries to employees who are located in outstations, it is preferable to issue a demand draft (DD) during the 4th week (between the 25th to 30th). For local clearances, you may issue the cheque with a gap of 2 to 3 days before the month's closure.

L. Kumar

Dear Mr. Kumar,

Thank you for your reply.

Our organization is a manufacturing unit, and we pay wages and salaries before the 7th day of the following month. However, starting this month, the company wants to issue account payee cheques on the 7th day of the following month to the staff.

We would like to clarify what the law states because we are confused about whether the 7th day of the following month refers to the clearing date of the cheque or if we can pay by cheque on the 7th day.

Thank you and regards,
Amit Kumar Garg

Dear Amit,

The law does not say anything in this respect. If the 7th of every month is your salary disbursement day, then you can disburse the account payee cheque on the 7th to your employees - what is the issue in it??

L. Kumar