Dear Seniors,
I am working in a construction company. I have to pay bank loan EMIs, and my company pays salary approximately after one month, in the next month, i.e., for example: January month salary is paid in February 28 or after the completion of February month.
I have requested management or the Site Senior Authority that I have to pay the bank's EMI on the 7th of every month. Banks are charging heavy interest on my accounts.
As per the law, the company has to pay salary till the 10th of every month.
Please suggest what to do?
From India, Jaipur
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I am working in a construction company. I have to pay bank loan EMIs, and my company pays salary approximately after one month, in the next month, i.e., for example: January month salary is paid in February 28 or after the completion of February month.
I have requested management or the Site Senior Authority that I have to pay the bank's EMI on the 7th of every month. Banks are charging heavy interest on my accounts.
As per the law, the company has to pay salary till the 10th of every month.
Please suggest what to do?
From India, Jaipur
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If the company is not in good financial condition, you should leave the company at the earliest; otherwise, your EMIs will be defaulted.
For late salary payment, you may complain to the labor office, but only if you are covered under the definition as an employee under the Payment of Wages Act.
From India, Pune
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470For late salary payment, you may complain to the labor office, but only if you are covered under the definition as an employee under the Payment of Wages Act.
From India, Pune
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Payment of Wages Act 1936 and Rajasthan Payment of Wages Rules
The wage payment is regulated by the Payment of Wages Act 1936 and presumably the Rajasthan Payment of Wages Rules in this case, provided the wages are less than Rs. 24,000 (from August 2017). As per Section 5 of the Act, wages have to be paid within 7 days if the number of employees is less than 1,000, and by the 10th day otherwise, after the expiry of the wage month. The Section 5 of the Act is extracted below:
Time of payment of wages
(1) The wages of every person employed upon or in:
(a) any railway, factory, or industrial or other establishment upon or in which less than one thousand persons are employed, shall be paid before the expiry of the seventh day,
(b) any other railway, factory, or industrial or other establishment, shall be paid before the expiry of the tenth day, after the last day of the wage-period in respect of which the wages are payable.
Filing a complaint for delayed wages
As per Section 15 of the Act, an aggrieved employee, an advocate, or a trade union official who is authorized by the employee or the local Labour Inspector can file a complaint of delay before the Authority under the Act (local ALC) within twelve months thereof and is entitled to compensation of Rs. 1,000 to Rs. 3,500 as the case may be. The employer could also be punished under Section 20 of the Act (Rs. 500 under Rajasthan Rules).
Concerns about enforcement and compliance
This is a very dangerous perceptible trend in the industry increasingly felt these days to circumvent the provisions of the Act and reflects poor enforcement by the Labour Department. It is high time the authorities concerned take due cognizance of the brazen breaches of the Act.
From India, Mumbai
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The wage payment is regulated by the Payment of Wages Act 1936 and presumably the Rajasthan Payment of Wages Rules in this case, provided the wages are less than Rs. 24,000 (from August 2017). As per Section 5 of the Act, wages have to be paid within 7 days if the number of employees is less than 1,000, and by the 10th day otherwise, after the expiry of the wage month. The Section 5 of the Act is extracted below:
Time of payment of wages
(1) The wages of every person employed upon or in:
(a) any railway, factory, or industrial or other establishment upon or in which less than one thousand persons are employed, shall be paid before the expiry of the seventh day,
(b) any other railway, factory, or industrial or other establishment, shall be paid before the expiry of the tenth day, after the last day of the wage-period in respect of which the wages are payable.
Filing a complaint for delayed wages
As per Section 15 of the Act, an aggrieved employee, an advocate, or a trade union official who is authorized by the employee or the local Labour Inspector can file a complaint of delay before the Authority under the Act (local ALC) within twelve months thereof and is entitled to compensation of Rs. 1,000 to Rs. 3,500 as the case may be. The employer could also be punished under Section 20 of the Act (Rs. 500 under Rajasthan Rules).
Concerns about enforcement and compliance
This is a very dangerous perceptible trend in the industry increasingly felt these days to circumvent the provisions of the Act and reflects poor enforcement by the Labour Department. It is high time the authorities concerned take due cognizance of the brazen breaches of the Act.
From India, Mumbai
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Common Pitfalls in Paying Employees
A few things you might not know about paying employees:
Withholding Without Consent. An employer cannot withhold a portion of an employee’s wages without their consent, except for withholdings required by law (FICA taxes, for example).
Withholding Pay as Punishment. An employer cannot withhold pay as punishment—if an employee violates company policy and leaves on bad terms, they are still owed their full paycheck.
Last Paycheck. An employee’s last paycheck is generally owed on or before the next regular payday; even if overtime was unapproved, it still must be paid in most cases.
More About Legal Remedies Against Employers
The Department of Labor has provisions that allow employees to bring a lawsuit to recover back wages owed. An employee may bring a private lawsuit, and the Indian Labor law may obtain an injunction to restrain an employer from violating the provisions of the Fair Labor Standards Act.
There are several legal processes that can be followed by an employee to recover salary or wages. The first step that we recommend is sending a good notice from a credible lawyer who has a track record of handling such matters. However, before we tell you more about that, let us introduce you to some basic concepts in Indian labor laws that deal with the issues of non-payment of wages or salary.
India has an entire law on payment of salary called the Payment of Wages Act, though it does not apply to all levels of employees. It usually applies to low-wage blue-collar workers.
Effective September 11, 2012, the wage ceiling under the Payment of Wages Act, 1936 was increased to an average wage ceiling of INR 18,000 per month pursuant to a notification by the Indian Government. If you are not covered under this act, other remedies are still available.
Let’s see what the Payment of Wages Act has to say in this matter.
Section 4 of the Payment of Wages Act states:
Fixation of wage period: Every person responsible for the payment of wages under Section 3 shall fix periods in respect of which such wages shall be payable. No wage period shall exceed one month.
Monthly Salary Distribution Requirements:
A person working in an establishment with a wage not more than one thousand shall be paid before the expiry of the seventh day.
A person with a wage of more than one thousand shall be paid before the expiry of the tenth day.
If the employee is terminated by the employer, the wages earned by him shall be paid before the expiry of the second working day from the day his employment is terminated.
What Steps Can Be Taken by Employee:
If your employer is not paying your salary, you can get these remedies.
A) Approach Labour Commissioner: If an employer doesn’t pay your salary, you can approach the labour commissioner. They will help you to reconcile this matter, and if no solution is reached, the labour commissioner will hand over this matter to the court whereby a case against your employer may be pursued.
B) Industrial Dispute Act: An employee can file a suit under Section 33(c) of the Industrial Dispute Act, 1947 for recovery of money due from an employer. When the salary is due from the employer, the employee himself or any other person authorized by him in writing on his behalf can claim to recover money. In case of the employee's death, the authorized person or heirs make an application to the labour court for recovery of money due. The court will further issue a certificate on being satisfied that the salary is due, and the collector shall proceed to recover the same. If any question arises as to the amount of money due or as to the amount at which such benefit should be computed, it would be computed according to rules under this Act.
Labour Court Timeline:
Cases have to be decided by such labour court within a period not exceeding three months, provided that where the presiding officer of a labour court considers it necessary or expedient to do so, he may, for reasons to be recorded in writing, extend such period by such further period as he may think fit.
Reference 3 – Section 33(c)(2) Industrial Dispute Act, 1947
What About Executives, Managers, and Those Who Earn Above INR 18,000 a Month?
If you are a manager or executive-level employee, you can file a case against the company in the civil court under order 37 of the Court of Civil Procedure. This is faster than the usual slow procedure in civil courts, called a summary suit. It is quite effective, but should not be pursued as a first resort. There are easier things at your disposal as well. Out of 100 cases, maybe 5-7 require such effort. However, many lawyers are quick to jump to this. Before opting for this, ask your lawyer to exhaust other means.
What If the Company Is Not Paying with a Fraudulent or Dishonest Intent?
If an employee is affected by the company’s fraudulent activities, then he may seek some strong actions.
Employer Fraud Punishment:
Section 447 of the Companies Act, 2013 lays down punishment for fraud. A person shall be liable for imprisonment not less than 6 months, which may extend to 10 years. Fine not less than the amount involved in fraud, which may extend up to three times the fraud amount. Subsequent measures can be taken under Section 447 of the Act. An employee can also file a criminal case against the company under the Indian Penal Code.
First Step to Recover Unpaid Salary
Step 1: We strongly recommend sending a legal notice enumerating all the actions that you may take from a credible lawyer. Before going to a lawyer, ensure that they have some track record in doing such work. From ClikLawyer, you can file a notice like this for INR 2500 only. You should not pay above INR 3000 in any case.
Step 2: If this does not work, approaching the police for a cheating case, where there is enough evidence for such fraud, is critical. At this stage, it is important to prepare a detailed case file to give to the police, and your lawyer should assist you in this. A majority of such complaints are not accepted due to weak drafting and lack of prima facie evidence. This is where a good lawyer can make a lot of difference. Any good lawyer will charge not more than INR 2500 to handle a police complaint matter at present.
Step 3: Where a criminal case is not an option or does not produce results, we recommend going for a summary suit or labour court, as the case may be. In our experience of handling such matters in large numbers, we can say that not more than 10% of such disputes need to go to this stage if the matter was handled well in earlier stages. The challenge is that lawyers are more comfortable and earn more money at this stage, so if they don’t have your interest in mind, they might hurry to this stage.
Important Things to Keep in Mind When You Are Trying to Recover Your Unpaid Salary
The notice is a very important psychological tool, and getting the salary in less time is a psychological game. If the employer understands the consequences quickly, he will settle before you need to go to court, which keeps costs low as well. However, only a few lawyers do this kind of work because it may not be very profitable for them.
There are many cases in India where employers do not pay salary for a month or a couple of months and easily get away with the same. A good example is Kingfisher Airlines. When it shut down its operations, many workers were not paid their dues.
http://www.bangaloresecretary.com/ Consultancy in Bangalore | Placement & Consultancy Services in Bangalore
From India, Bangalore
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A few things you might not know about paying employees:
Withholding Without Consent. An employer cannot withhold a portion of an employee’s wages without their consent, except for withholdings required by law (FICA taxes, for example).
Withholding Pay as Punishment. An employer cannot withhold pay as punishment—if an employee violates company policy and leaves on bad terms, they are still owed their full paycheck.
Last Paycheck. An employee’s last paycheck is generally owed on or before the next regular payday; even if overtime was unapproved, it still must be paid in most cases.
More About Legal Remedies Against Employers
The Department of Labor has provisions that allow employees to bring a lawsuit to recover back wages owed. An employee may bring a private lawsuit, and the Indian Labor law may obtain an injunction to restrain an employer from violating the provisions of the Fair Labor Standards Act.
There are several legal processes that can be followed by an employee to recover salary or wages. The first step that we recommend is sending a good notice from a credible lawyer who has a track record of handling such matters. However, before we tell you more about that, let us introduce you to some basic concepts in Indian labor laws that deal with the issues of non-payment of wages or salary.
India has an entire law on payment of salary called the Payment of Wages Act, though it does not apply to all levels of employees. It usually applies to low-wage blue-collar workers.
Effective September 11, 2012, the wage ceiling under the Payment of Wages Act, 1936 was increased to an average wage ceiling of INR 18,000 per month pursuant to a notification by the Indian Government. If you are not covered under this act, other remedies are still available.
Let’s see what the Payment of Wages Act has to say in this matter.
Section 4 of the Payment of Wages Act states:
Fixation of wage period: Every person responsible for the payment of wages under Section 3 shall fix periods in respect of which such wages shall be payable. No wage period shall exceed one month.
Monthly Salary Distribution Requirements:
A person working in an establishment with a wage not more than one thousand shall be paid before the expiry of the seventh day.
A person with a wage of more than one thousand shall be paid before the expiry of the tenth day.
If the employee is terminated by the employer, the wages earned by him shall be paid before the expiry of the second working day from the day his employment is terminated.
What Steps Can Be Taken by Employee:
If your employer is not paying your salary, you can get these remedies.
A) Approach Labour Commissioner: If an employer doesn’t pay your salary, you can approach the labour commissioner. They will help you to reconcile this matter, and if no solution is reached, the labour commissioner will hand over this matter to the court whereby a case against your employer may be pursued.
B) Industrial Dispute Act: An employee can file a suit under Section 33(c) of the Industrial Dispute Act, 1947 for recovery of money due from an employer. When the salary is due from the employer, the employee himself or any other person authorized by him in writing on his behalf can claim to recover money. In case of the employee's death, the authorized person or heirs make an application to the labour court for recovery of money due. The court will further issue a certificate on being satisfied that the salary is due, and the collector shall proceed to recover the same. If any question arises as to the amount of money due or as to the amount at which such benefit should be computed, it would be computed according to rules under this Act.
Labour Court Timeline:
Cases have to be decided by such labour court within a period not exceeding three months, provided that where the presiding officer of a labour court considers it necessary or expedient to do so, he may, for reasons to be recorded in writing, extend such period by such further period as he may think fit.
Reference 3 – Section 33(c)(2) Industrial Dispute Act, 1947
What About Executives, Managers, and Those Who Earn Above INR 18,000 a Month?
If you are a manager or executive-level employee, you can file a case against the company in the civil court under order 37 of the Court of Civil Procedure. This is faster than the usual slow procedure in civil courts, called a summary suit. It is quite effective, but should not be pursued as a first resort. There are easier things at your disposal as well. Out of 100 cases, maybe 5-7 require such effort. However, many lawyers are quick to jump to this. Before opting for this, ask your lawyer to exhaust other means.
What If the Company Is Not Paying with a Fraudulent or Dishonest Intent?
If an employee is affected by the company’s fraudulent activities, then he may seek some strong actions.
Employer Fraud Punishment:
Section 447 of the Companies Act, 2013 lays down punishment for fraud. A person shall be liable for imprisonment not less than 6 months, which may extend to 10 years. Fine not less than the amount involved in fraud, which may extend up to three times the fraud amount. Subsequent measures can be taken under Section 447 of the Act. An employee can also file a criminal case against the company under the Indian Penal Code.
First Step to Recover Unpaid Salary
Step 1: We strongly recommend sending a legal notice enumerating all the actions that you may take from a credible lawyer. Before going to a lawyer, ensure that they have some track record in doing such work. From ClikLawyer, you can file a notice like this for INR 2500 only. You should not pay above INR 3000 in any case.
Step 2: If this does not work, approaching the police for a cheating case, where there is enough evidence for such fraud, is critical. At this stage, it is important to prepare a detailed case file to give to the police, and your lawyer should assist you in this. A majority of such complaints are not accepted due to weak drafting and lack of prima facie evidence. This is where a good lawyer can make a lot of difference. Any good lawyer will charge not more than INR 2500 to handle a police complaint matter at present.
Step 3: Where a criminal case is not an option or does not produce results, we recommend going for a summary suit or labour court, as the case may be. In our experience of handling such matters in large numbers, we can say that not more than 10% of such disputes need to go to this stage if the matter was handled well in earlier stages. The challenge is that lawyers are more comfortable and earn more money at this stage, so if they don’t have your interest in mind, they might hurry to this stage.
Important Things to Keep in Mind When You Are Trying to Recover Your Unpaid Salary
The notice is a very important psychological tool, and getting the salary in less time is a psychological game. If the employer understands the consequences quickly, he will settle before you need to go to court, which keeps costs low as well. However, only a few lawyers do this kind of work because it may not be very profitable for them.
There are many cases in India where employers do not pay salary for a month or a couple of months and easily get away with the same. A good example is Kingfisher Airlines. When it shut down its operations, many workers were not paid their dues.
http://www.bangaloresecretary.com/ Consultancy in Bangalore | Placement & Consultancy Services in Bangalore
From India, Bangalore
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