Is it legal on employer’s part to hold employees salary?
I am currently associated with a small scale IT Company. Currently we are in process of regularizing our attendance and payroll cycle. Presently we are following an attendance cycle from 1st to 30th/31st of every month and salaries get credited on 1st of every month.
But now our management team is inclined to make changes in the attendance cycle from 25th to 24th of every month, stating accounts and HR could get time to process the salary inputs and then only salary can be credited on 1st of every month. But if we implement this cycle into our payroll system from next month onwards then 6/7 days salary of every existing employee will be on hold with company and can be cleared during his full and final settlement only.
Please let me know how legal this act would be, as company will take hold of employee salary for those days on which he has actually word for.
From India, Pune
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I am currently associated with a small scale IT Company. Currently we are in process of regularizing our attendance and payroll cycle. Presently we are following an attendance cycle from 1st to 30th/31st of every month and salaries get credited on 1st of every month.
But now our management team is inclined to make changes in the attendance cycle from 25th to 24th of every month, stating accounts and HR could get time to process the salary inputs and then only salary can be credited on 1st of every month. But if we implement this cycle into our payroll system from next month onwards then 6/7 days salary of every existing employee will be on hold with company and can be cleared during his full and final settlement only.
Please let me know how legal this act would be, as company will take hold of employee salary for those days on which he has actually word for.
From India, Pune
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Hi Roshni,
It is a good idea by the management to change the attendance cycle from the purview of administration. However, just because of the technical change in the payroll system, the employees should not suffer. Work out a one-time modification in the system (under some miscellaneous head) and pay the entire salary for the first time. This should be possible with some technical assistance. If in case this is not possible, give away the 6 days' salary by way of cheque. It is not advisable to wait until the full and final settlement.
Sree
From India, New Delhi
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9It is a good idea by the management to change the attendance cycle from the purview of administration. However, just because of the technical change in the payroll system, the employees should not suffer. Work out a one-time modification in the system (under some miscellaneous head) and pay the entire salary for the first time. This should be possible with some technical assistance. If in case this is not possible, give away the 6 days' salary by way of cheque. It is not advisable to wait until the full and final settlement.
Sree
From India, New Delhi
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Hi Roshni,
There are many companies who process the technical things on 25-24 cycle...
What you can do is when you implement this cycle for the first time, process for 1st to 24th of the month, pay accordingly for the 24 days...
Then you start 25-24 cycle which will work smoothly....
This way, you are holding salary till the F&F
Neither are you flawing the law which states that payment has to be done monthly at the max so you dont cross your 30 days period...
And your technicial glitch is also taken care of...
All the best, hope it helps
From India, Mumbai
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There are many companies who process the technical things on 25-24 cycle...
What you can do is when you implement this cycle for the first time, process for 1st to 24th of the month, pay accordingly for the 24 days...
Then you start 25-24 cycle which will work smoothly....
This way, you are holding salary till the F&F
Neither are you flawing the law which states that payment has to be done monthly at the max so you dont cross your 30 days period...
And your technicial glitch is also taken care of...
All the best, hope it helps
From India, Mumbai
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Thanks, Sree.
I have discussed this idea with my management team, but it seems they are not willing to opt for it. I am very sure about their exact thought process behind this, but what I could sense is they want to hold the money from employees' salary. They have made up their mind and don't want to get convinced. Is there any compliance available under any law that may not allow the employer to do this?
Regards,
Roshni
From India, Pune
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I have discussed this idea with my management team, but it seems they are not willing to opt for it. I am very sure about their exact thought process behind this, but what I could sense is they want to hold the money from employees' salary. They have made up their mind and don't want to get convinced. Is there any compliance available under any law that may not allow the employer to do this?
Regards,
Roshni
From India, Pune
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Hi Ankita,
Thanks for your input. For the initial implementation, we will be following the 1st to 24th cycle, but the salary will be credited on the 1st of the next month. This means employees' six working days will remain unpaid, and this amount will be on hold until we clear the full and final settlement. This is where I am facing a challenge. 😕.
From India, Pune
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Thanks for your input. For the initial implementation, we will be following the 1st to 24th cycle, but the salary will be credited on the 1st of the next month. This means employees' six working days will remain unpaid, and this amount will be on hold until we clear the full and final settlement. This is where I am facing a challenge. 😕.
From India, Pune
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Hi Ankita,
Thanks for your inputs. For the first-time implementation, we will be following the 1st to 24th cycle, but the salary will be credited on the 1st of the next month only, though employees' 6 working days will remain unpaid. This amount will remain on hold until we clear the full and final settlement. This is where I am stuck up :-|.
How come the employee's 6 working days' salary will be held up until the full and final settlement? In the first month, you are paying for the 1st to the 24th, and in the second month, you are paying from the 25th of the first month to the 24th of the second month and so on. If the employee leaves in between, the difference in working days from the last salary paid month until the last working day has to be calculated. It seems that there is some confusion built up in your mind.
From India, Ahmadabad
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Thanks for your inputs. For the first-time implementation, we will be following the 1st to 24th cycle, but the salary will be credited on the 1st of the next month only, though employees' 6 working days will remain unpaid. This amount will remain on hold until we clear the full and final settlement. This is where I am stuck up :-|.
How come the employee's 6 working days' salary will be held up until the full and final settlement? In the first month, you are paying for the 1st to the 24th, and in the second month, you are paying from the 25th of the first month to the 24th of the second month and so on. If the employee leaves in between, the difference in working days from the last salary paid month until the last working day has to be calculated. It seems that there is some confusion built up in your mind.
From India, Ahmadabad
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Dear Roshna,
This is not as difficult as you guys are thinking. If the cut-off date for salary processing is 25-24 every month, then the balance days can be shown as supposed days, assuming that all employees will be present for the next 6 days. If not, then in the next salary cycle, you will either mark his leave as "CL, SL, or PL" or show it as leave without pay and deduct accordingly. (However, every employee should be aware that the salary cycle is from the 25th to the 24th of every month to avoid any confusion.) In case an employee leaves during that period, you can recover that amount in the F&F process.
Thanks,
Mahendra
From India, Mumbai
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This is not as difficult as you guys are thinking. If the cut-off date for salary processing is 25-24 every month, then the balance days can be shown as supposed days, assuming that all employees will be present for the next 6 days. If not, then in the next salary cycle, you will either mark his leave as "CL, SL, or PL" or show it as leave without pay and deduct accordingly. (However, every employee should be aware that the salary cycle is from the 25th to the 24th of every month to avoid any confusion.) In case an employee leaves during that period, you can recover that amount in the F&F process.
Thanks,
Mahendra
From India, Mumbai
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