Here’s What You Can Do If Your Salary Is Delayed or Not Credited

Salary not being paid on time or even being withheld without any reason is punishable by law. Here's what you can do to rectify the situation.

By Vidya Raja

January 8, 2021

Chetna Singh (38) has been an employee of a garment manufacturing unit in Coimbatore for over five years now. Since the beginning of 2020 there were delays in her salary getting credited and since August 2020, she received no salary for four months. Despite taking it internally she did not get any relief and that is when she decided to look up the legal recourse that was available to her.

What can you do if your employer refuses to pay your salary or delays the payment infinitely? While this is most painful, unfortunately, it is not an uncommon occurrence. Fortunately, there are legal remedies available to you to address this issue. In this article, we will take you through what your rights are in case this happens to you, as an employee.

But before going the legal route, as a practical matter, do communicate with your employer, in writing. If your salary is delayed, ask for their explanations first. If you have gone through the step of internal communication with no fruitful outcome, then you are on solid grounds to exercise your legal rights.

What’s your legal recourse?

1. First and foremost, send a detailed legal notice to your employer/company mentioning all the reasons why you are aggrieved. It is recommended that you send this legal notice within 90 days from the lapse of salary payment. The law divides the employees into two buckets of those earning below Rs 18,000 and those who earn more.
2. The Payment of Wages Act, 1936 governs those blue-collared workers who earn less than Rs 18,000 a month. Section 4 of this Act stipulates that ‘no wage period shall exceed one month. In case of any discrepancy or non-payment of salary one can approach the labour commissioner to seek redressal.
3. Cases that come to the labour court must be decided upon within a three-month period. If the matter is not resolved by the labour commissioner the same can be pursued in a court of law by the employee.
4. If your salary is more than Rs 18,000 a month then you can pursue the matter in a civil court.
5. You can file a case against the company in the civil court under order 37 of Court of Civil Procedure.

In scenarios where the company is indulging in fraudulent behaviour

Corporate fraud means a corporation purposefully providing dishonest information with the purpose of obscuring truth and deceiving the recipient of the data with the intent to gain an advantage. For example, if company ‘A’ has the wherewithal to pay the salary but is communicating that it does not have the funds, this could be seen as misrepresentation and fraud in the eyes of the court.

Under Section 447 of Companies Act, 2013, punishment for fraud is laid down.
Those indulging in such fraudulent practises are liable for imprisonment of no less than six months, which may even extend to 10 years.
An employee can also file a criminal case against the company under the Indian Penal Code (IPC).