What If The Company Does Not Pay Your Salary?

It is commonly noted that employers frequently refuse to pay their workers’ salaries at the time of termination. Employers frequently believe that workers lack the means to fight back, which can result in salaries not being paid. Nonetheless, several laws in India safeguard workers’ rights when they are not paid their full salary.

Initially, it is advised in such a situation that the worker send their employer a letter or notice requesting appropriate explanations for the non-payment or late payment. However, the employee will need to take legal action if there is no favorable outcome or if the reasons are not legitimate.

Legal Recourse

A few fundamental statutes safeguard Indian citizens’ salary rights are as follows:

• The Wage Payment Act: The primary beneficiaries of this Act are low-wage blue-collar workers making less than Rs 18,000 per month. According to Section 4, salary payments may only be postponed for a set amount of time, usually one month. That is the maximum length that can be added.
• The Minimum Wage Act: The minimum wage that each employee should receive is outlined in this Act. The minimum wage varies from state to state and is based on the kind of work that the employee is performing.
• The 2016 Insolvency and Bankruptcy Code: If an employee’s salary is unpaid or delayed, they may file a petition to establish a legal claim for the payment. After the petition is filed, a committee of creditors is established and a legal expert is appointed. The business is liquidated if a suitable resolution regarding the unpaid salary is not reached.
• Mediation and Arbitration: Only if arbitration is permitted by the “Employment Contract” clause may the employee use this costly procedure. However, the majority of employment contracts contain an arbitration clause because arbitration is a commonly used dispute resolution mechanism. But the procedure takes a very long time.
• On the other hand, mediation is the process of having an impartial third party hear both sides of the argument and assist in reaching a peaceful conclusion. But for mediation to occur, the employer must be prepared to appear before the mediator.

The lawsuit’s filing Taking the employer to court is an additional way to get paid Lawsuits of two kinds may be filed

• Criminal Action: Employers are legally required to pay their employees’ salaries on time. If the employer disputes this, the employee may file a criminal suit for cheating and breach of trust under section 420 of the Indian Penal Code, 1860.
• Civil Action: After serving the employer with a legal notice claiming unpaid debts, the employee may file a civil lawsuit against his employer under the Civil Procedure Code, 1908. The employee may take legal action if he refuses to pay the salary.
• The 1881 Negotiable Instruments Act: Sometimes the employee receives their salary from the employer already in the form of a bounced cheque. The employee may bring a lawsuit under the Negotiable Instruments Act of 1881 if the employer declines to pay the same amount if it is renewed.

Employer withholding payment with malice or deceit

The following remedies are available if the employee suffers as a result of the employer’s deceitful intent:

• Fraud is punishable under section 447 of the Companies Act, 2013. Penalties include a minimum 6-month jail sentence, with a maximum of 10 years.
• A fine equal to or greater than the amount of fraud will be imposed on the employer.
• It could go up to three times as far as fraud. Filing a criminal case following the Indian Penal Code.

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