Can any organisation retain some part of our salary as security or retention amount, and the amount shall be given to the employee upon successful completion of probation period. Kindly advise.
From India, Pune
1From India, Pune
Dear 
,
There is no provision in Law - Payment of Wages Act or any other Act, permitting the employer to make deduction from salary of employee against retention or security. Please note that any deduction other than authorised deductions as listed in section 7(2) of POW Act 1936 is unathorised deduction.
From India, Mumbai
There is no provision in Law - Payment of Wages Act or any other Act, permitting the employer to make deduction from salary of employee against retention or security. Please note that any deduction other than authorised deductions as listed in section 7(2) of POW Act 1936 is unathorised deduction.
From India, Mumbai
this is a unethical and age old practices done in some family type companies. holding money as security deposit from salary is not statutory nor ethical. hence ask your employer to do business in an ethical way where people would like to work with your company.
From India, New Delhi
From India, New Delhi
You have not given any details of the company, size, position of the employee, etc. so we are talking on assumption.
1. If you are covered by payment of wages act, this is illegal (note wages not exceeding ₹18000 per month)
2. If your salary is above 18000 then there is no protection of that act so company can retain. However, from point of view if PF, ESIC, income tax, it does not make sense.
3. If this is at minimum wages level, then definitely asking for trouble,
If they were smart, they would instead have a completion bonus, which is legal and allowed.
From India, Mumbai
1. If you are covered by payment of wages act, this is illegal (note wages not exceeding ₹18000 per month)
2. If your salary is above 18000 then there is no protection of that act so company can retain. However, from point of view if PF, ESIC, income tax, it does not make sense.
3. If this is at minimum wages level, then definitely asking for trouble,
If they were smart, they would instead have a completion bonus, which is legal and allowed.
From India, Mumbai
Dear Saswata ji,
May I request you to kindly elaborate on it?
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From India, Mumbai
May I request you to kindly elaborate on it?
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From India, Mumbai
dear Sharadardran
god bless you
all theories and law apart,
the organisations keep money as security deducted as some percentage of your wages , to make good the losses they are likely to suffer in respect of stores tools and equipment issued to you for functioning. many schools keep security from their teachers to make good equipment / books / laptops issued to them .
the aim is the organisation does not suffer on sudden separation .
secondly it is not for compensation of notice period
thirdly there is no law banning the organisations from keeping a deposit of money against the issues made to the employee.
regards
dr ram
From India, Indore
god bless you
all theories and law apart,
the organisations keep money as security deducted as some percentage of your wages , to make good the losses they are likely to suffer in respect of stores tools and equipment issued to you for functioning. many schools keep security from their teachers to make good equipment / books / laptops issued to them .
the aim is the organisation does not suffer on sudden separation .
secondly it is not for compensation of notice period
thirdly there is no law banning the organisations from keeping a deposit of money against the issues made to the employee.
regards
dr ram
From India, Indore
Under the Companies Act 1956, the deposit retained by a Company from employees salary, was to be kept in a separate bank account designated as such. (This Act has been replaced by the Companies Act 2013- however certain sections of this 2013 Act are not yet notified.) I do not know what is the status of such deposits under the new act. May be some expert in this forum can clarify
A S Bhat
From India, Pune
A S Bhat
From India, Pune
Hello Sharadardran,
Can you pl mention THE EXACT WORDING used in your Offer/Appointment letter towards this amount retention?
I am not sure that the words your used here.....security or retention.......are the exact words.
IF INDEED the words used are what you mentioned, then linking the payment with Probation doesn't make sense at all.
I concur with Saswata Banerjee's views on this aspect, having seen even Limited Companies using this concept in their HR practices.
UNLESS you give the exact wordings, you are leaving it to each member to make his/her own assumptions to give suggestions & then DON'T blame any of them for giving such suggestions/advice.
Rgds,
TS
From India, Hyderabad
Can you pl mention THE EXACT WORDING used in your Offer/Appointment letter towards this amount retention?
I am not sure that the words your used here.....security or retention.......are the exact words.
IF INDEED the words used are what you mentioned, then linking the payment with Probation doesn't make sense at all.
I concur with Saswata Banerjee's views on this aspect, having seen even Limited Companies using this concept in their HR practices.
UNLESS you give the exact wordings, you are leaving it to each member to make his/her own assumptions to give suggestions & then DON'T blame any of them for giving such suggestions/advice.
Rgds,
TS
From India, Hyderabad
You don't need to out so any dots. If the message is more than 35 words long, it accepts.
If any salary is held back, the company has to pay tax / TDS on it at the time of it becoming due and not at the time when it is paid. If that TDS is not paid the amount becomes disallowed as expense.
PF and ESIC has to be paid at the time when the salary becomes due and not at the time when it is paid.
Also, if the amount is not paid, the company can not keep the it, it has to be deposited with the labour welfare fund.
In the end, if laws are followed, holding back the salary is not worth it.
If laws are disregarded then ofcourse this is all moot.
From India, Mumbai
If any salary is held back, the company has to pay tax / TDS on it at the time of it becoming due and not at the time when it is paid. If that TDS is not paid the amount becomes disallowed as expense.
PF and ESIC has to be paid at the time when the salary becomes due and not at the time when it is paid.
Also, if the amount is not paid, the company can not keep the it, it has to be deposited with the labour welfare fund.
In the end, if laws are followed, holding back the salary is not worth it.
If laws are disregarded then ofcourse this is all moot.
From India, Mumbai
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