Issue with Employee Salary Payments
I need advice regarding the pain experienced by the current and ex-employees of the company. It is a US-based software company with an Indian entity in Bengal. Employees have not been paid their regular salary for over two years, with currently over six months of pending salary. Certain valuable employees are paid regularly, but the rest of the employees are not paid, and even statutory dues are not settled. When there is a visit or inquiry by these agencies, they are "settled." Gratuity and FFS are pending for employees who have left over four years. The management cites "financial distress" and says things will tide over soon, pay around 30% to 40% of the salary, and keep quiet. Employees who can leave have left, but in the current scenario, prospects are not good.
As employees are afraid of reprisals by the company, they have not lodged any major complaints. Ex-employees have lodged complaints, and cases are "settled." As the CEO is a person of Indian origin and stays abroad, where Indian laws are not applicable to him. Complaints have been given to Labor, PF, and ESI, but there has been no response from them.
Except for a privileged few, everybody is in fear of losing their job. The company is doing well in terms of service and receiving regular payments.
Please advise on steps to address this problem.
From India, Kolkata
Acknowledge(0)
Amend(0)
I need advice regarding the pain experienced by the current and ex-employees of the company. It is a US-based software company with an Indian entity in Bengal. Employees have not been paid their regular salary for over two years, with currently over six months of pending salary. Certain valuable employees are paid regularly, but the rest of the employees are not paid, and even statutory dues are not settled. When there is a visit or inquiry by these agencies, they are "settled." Gratuity and FFS are pending for employees who have left over four years. The management cites "financial distress" and says things will tide over soon, pay around 30% to 40% of the salary, and keep quiet. Employees who can leave have left, but in the current scenario, prospects are not good.
As employees are afraid of reprisals by the company, they have not lodged any major complaints. Ex-employees have lodged complaints, and cases are "settled." As the CEO is a person of Indian origin and stays abroad, where Indian laws are not applicable to him. Complaints have been given to Labor, PF, and ESI, but there has been no response from them.
Except for a privileged few, everybody is in fear of losing their job. The company is doing well in terms of service and receiving regular payments.
Please advise on steps to address this problem.
From India, Kolkata
Acknowledge(0)Amend(0)
You need to follow up on the complaint made to Labour, PF, and ESI authorities. Additionally, consider the option of exposing the issue in both Indian and US media. Like NASSCOM in the US, there will be an industry association; try to approach them. Also, send a complaint to the registrar of companies stating deliberate disregard for statutory obligations.
From India, Mumbai
Acknowledge(0)Amend(0)
1593From India, Mumbai
Acknowledge(0)Amend(0)
Employer's Liability for Wage Payment
Every employer is liable for paying wages and salaries on or before the specified dates mentioned in the Payment of Wages Act. You may follow up with the Local Labour Department, PF, and ESIC officers to address the issue and take appropriate action. It doesn't matter if the CEO is in India or abroad; the company is a separate entity and can be sued for its operations.
Responsibility for Compliance with Labour Acts
In every organization where ESIC, PF, Bonus, Gratuity, etc., acts are applicable, the company authorizes one person who is nominated as responsible for adherence to the above acts. Try to find out in your organization who is nominated/responsible for the same. It can be found on the notice board of the organization. If no one is appointed, then the person who is signing the Appointment Letter and Relieving Letter is deemed responsible for adherence to the above acts.
You may reach us for further consultation at [Email Removed For Privacy Reasons].
Regards,
HR Revolution Services
Ghaziabad
From India, New Delhi
Acknowledge(0)Amend(0)
Every employer is liable for paying wages and salaries on or before the specified dates mentioned in the Payment of Wages Act. You may follow up with the Local Labour Department, PF, and ESIC officers to address the issue and take appropriate action. It doesn't matter if the CEO is in India or abroad; the company is a separate entity and can be sued for its operations.
Responsibility for Compliance with Labour Acts
In every organization where ESIC, PF, Bonus, Gratuity, etc., acts are applicable, the company authorizes one person who is nominated as responsible for adherence to the above acts. Try to find out in your organization who is nominated/responsible for the same. It can be found on the notice board of the organization. If no one is appointed, then the person who is signing the Appointment Letter and Relieving Letter is deemed responsible for adherence to the above acts.
You may reach us for further consultation at [Email Removed For Privacy Reasons].
Regards,
HR Revolution Services
Ghaziabad
From India, New Delhi
Acknowledge(0)Amend(0)
Non-payment of Salary: Legal Recourse
Non-payment of salary is a serious offense under the Payment of Wages Act, 1936, and a major breach of the contract of employment on the part of the employer. Employees with a monthly gross salary of Rs. 24,000 and below can file a claim either individually, jointly, or through their trade union or the inspector under the Act u/s 15(1) before the Deputy Labor Commissioner for the area. They can seek an order directing the employer to pay the unpaid salary with a fine of 10 times the amount due.
When even less educated workmen can boldly knock on the doors of the state authorities against such unfair labor practices to get redress, it is unfortunate that highly educated software employees remain mute and scared of reprisals by the employer.
From India, Salem
Acknowledge(0)Amend(0)
Non-payment of salary is a serious offense under the Payment of Wages Act, 1936, and a major breach of the contract of employment on the part of the employer. Employees with a monthly gross salary of Rs. 24,000 and below can file a claim either individually, jointly, or through their trade union or the inspector under the Act u/s 15(1) before the Deputy Labor Commissioner for the area. They can seek an order directing the employer to pay the unpaid salary with a fine of 10 times the amount due.
When even less educated workmen can boldly knock on the doors of the state authorities against such unfair labor practices to get redress, it is unfortunate that highly educated software employees remain mute and scared of reprisals by the employer.
From India, Salem
Acknowledge(0)Amend(0)CiteHR is an AI-augmented HR knowledge and collaboration platform, enabling HR professionals to solve real-world challenges, validate decisions, and stay ahead through collective intelligence and machine-enhanced guidance. Join Our Platform.
TAMIMI LAbor LAw.pdf