No Tags Found!

tiwari s
Is a Employer authorized to deduct Installment of loan from his Employee who taken Loan from a bank under payment of wages act.
From India, Bhopal
samvedan
315

Hello,

Let us get the fundamentals clear:

1) I assume that the Payment Wages Act is applicable.

2) I assume that the loan is by a cooperative bank or a cooperative society.

The legal position if these assumptions are correct is:

1) Yes, the employer is authorized to deduct installments and to send these to the coop bank/coop scty.

2) Not only that, under the cooperative society act, it is mandatory to deduct the said installments and remit.

3) If the employer fails or refuses to comply with this position then the concerned coop institute is entitled to get these recovered from the said employers as "arrears of land revenue" by following due legal process.

However other noteworthy points are:

1) There can not be TWO or more loans outstanding against an individuals. (Coop institutes often violate this)

2) While the total deduction from the earned wages of an employee can not be more that 50% under normal circumstances, if there is a coop loan the deduction can go up to 75% of earned wages.

3) The Payment of Wages Act stipulates under Sec 6 or 7 the various deductions can be made by the employer and the conditions attached.

If any doubts are created by this response, you may revert!

Regards

samvedan

December 22, 2012

---------------------------------

From India, Pune
saswatabanerjee
2392

Deduction for loan taken from a bank too can be deducted provided the employee has given a signed agreement to that effect or the company is a guarantee of the loan
From India, Mumbai
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.





Contact Us Privacy Policy Disclaimer Terms Of Service

All rights reserved @ 2024 CiteHR ®

All Copyright And Trademarks in Posts Held By Respective Owners.