An employee resigns on the 1st of February, and her January month salary is not paid and have been put on hold the payday happens to be 1st week of every month, is this legal?
From India, Delhi
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From India, Delhi
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Salary Payment Obligations
Salary for the period the employee has worked cannot be put on hold. It should be paid. If the employee is under any legal obligation to give notice before resignation, then the salary payable can be adjusted against the notice pay, but only with the consent of the employee.
Legal Obligations Under the Industrial Disputes Act
If the employee is covered under the scope of the Industrial Disputes Act, legally, they have no obligation to serve notice if they want to leave the company. As such, holding their salary is not an option to recover notice pay.
From India, Kannur
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4526Salary for the period the employee has worked cannot be put on hold. It should be paid. If the employee is under any legal obligation to give notice before resignation, then the salary payable can be adjusted against the notice pay, but only with the consent of the employee.
Legal Obligations Under the Industrial Disputes Act
If the employee is covered under the scope of the Industrial Disputes Act, legally, they have no obligation to serve notice if they want to leave the company. As such, holding their salary is not an option to recover notice pay.
From India, Kannur
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Dear madhu, If salary is being hold after resignation & not release in subsequent payable month. Legally under which Act Employer is committing non compliance.
From India, Ahmedabad
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From India, Ahmedabad
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Payment of Wages Act
The Payment of Wages Act provides for the payment of salary within 7 days of closing the wage month. The salary is due after the employee has worked or labored for the prescribed month. Therefore, non-payment of wages subsequent to resignation is questionable. The Act does not allow an employer to hold the salary of a resigned employee for any reason.
Industrial Disputes Act
The Industrial Disputes Act provides that in order to terminate an employee, the employer should give notice. The Act also states that if no notice is served, the employer should give salary in lieu of that notice. However, nowhere in the Act is it mentioned that an employee should also give prior notice or pay salary or compensate the employer by means of paying one month's salary in lieu of notice.
However, the above will not apply to employees who have functional responsibilities of managers. Please note that it applies to managers by function and not by designation.
From India, Kannur
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The Payment of Wages Act provides for the payment of salary within 7 days of closing the wage month. The salary is due after the employee has worked or labored for the prescribed month. Therefore, non-payment of wages subsequent to resignation is questionable. The Act does not allow an employer to hold the salary of a resigned employee for any reason.
Industrial Disputes Act
The Industrial Disputes Act provides that in order to terminate an employee, the employer should give notice. The Act also states that if no notice is served, the employer should give salary in lieu of that notice. However, nowhere in the Act is it mentioned that an employee should also give prior notice or pay salary or compensate the employer by means of paying one month's salary in lieu of notice.
However, the above will not apply to employees who have functional responsibilities of managers. Please note that it applies to managers by function and not by designation.
From India, Kannur
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Payment of Wages and Notice Periods
Payment of wages will only be applicable for wages below 24k. What about employees not covered under the act?
The notice period mentions a 30-day/15-day notice period clause but is silent on the payment of notice period for more than 30 days, for example, 90 days.
Addressing Managerial Level Issues
Most issues arise at the managerial level. How can we address this under labor law or statutory law?
Please guide.
From India, Mumbai
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Payment of wages will only be applicable for wages below 24k. What about employees not covered under the act?
The notice period mentions a 30-day/15-day notice period clause but is silent on the payment of notice period for more than 30 days, for example, 90 days.
Addressing Managerial Level Issues
Most issues arise at the managerial level. How can we address this under labor law or statutory law?
Please guide.
From India, Mumbai
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Non-Payment of Wages and Legal Implications
It is true that non-payment of wages for an employee whose salary exceeds Rs 24,000 does not fall under the purview of the Payment of Wages Act. However, if the person concerned is a workman under the Industrial Disputes (ID) Act, the appropriate authority can initiate action against the employer under the relevant provisions of the ID Act.
Managerial Employees and Service Conditions
If the employee is a manager by function, they will be outside the purview of the ID Act, and you can establish the service conditions for such an employee. This may include payment of salary in lieu of any unserved notice period. However, if the employee is not a manager and lacks managerial rights and duties, regardless of the salary received, you cannot impose any restrictive clauses such as notice or payment in lieu of notice.
Addressing Managerial Level Issues
If the issue involves a managerial level problem, there is no obstacle in proceeding with the recovery.
From India, Kannur
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It is true that non-payment of wages for an employee whose salary exceeds Rs 24,000 does not fall under the purview of the Payment of Wages Act. However, if the person concerned is a workman under the Industrial Disputes (ID) Act, the appropriate authority can initiate action against the employer under the relevant provisions of the ID Act.
Managerial Employees and Service Conditions
If the employee is a manager by function, they will be outside the purview of the ID Act, and you can establish the service conditions for such an employee. This may include payment of salary in lieu of any unserved notice period. However, if the employee is not a manager and lacks managerial rights and duties, regardless of the salary received, you cannot impose any restrictive clauses such as notice or payment in lieu of notice.
Addressing Managerial Level Issues
If the issue involves a managerial level problem, there is no obstacle in proceeding with the recovery.
From India, Kannur
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