Hi, Happy New Year to each one of you.
There's a lot of laws that are pro-employee or in favor of the employee. I just want to understand is there any law that is in favor of a company? Especially a start-up? When the company is facing a crisis in terms of funds generation but is still supporting its employees in arranging salary release as and when the funds are received even though it constitutes a little delay, are there no laws that can support a company during this period?
Is the role of HR only in support of employees irrespective of what the company faces and how bad the situation is? In any way, can the company defend itself in legal terms as accepted by the labor court if an employee wants to go legally because of delayed payment?
Let me know what's in support of the company. As it is common, I feel for a start-up to face these ups and downs before stabilizing themselves to a much better position.
From India, Bengaluru
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11There's a lot of laws that are pro-employee or in favor of the employee. I just want to understand is there any law that is in favor of a company? Especially a start-up? When the company is facing a crisis in terms of funds generation but is still supporting its employees in arranging salary release as and when the funds are received even though it constitutes a little delay, are there no laws that can support a company during this period?
Is the role of HR only in support of employees irrespective of what the company faces and how bad the situation is? In any way, can the company defend itself in legal terms as accepted by the labor court if an employee wants to go legally because of delayed payment?
Let me know what's in support of the company. As it is common, I feel for a start-up to face these ups and downs before stabilizing themselves to a much better position.
From India, Bengaluru
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Dear Aishwarya,
There are different rules / laws applicable to different categoties.
Your concern related to laws in favor of a company. In some cases there are exemptions to start ups, like if a new establishment facing loses than company is not bound to pay Bonus (applicable only for first 05 accounting year).
The HR role can be vital by recruiting and deploying adequate employee as per company budget. If any employee want to go legally with mutual understanding than it is fine (unless any employee lodge complaint for delayed salary and other compliance).
If you are not making profit than need not to pay income tax and even you can carry forward your loses as per the Income Tax Act, so that when you will start earning profit than first adjust your initial loses than only liable to pay Income Tax.
It seems your concern is related to Fund Crisis. Pls be noted facing loses and facing fund crisis are different scenario. If the fund crises is related to non collection from client or making exp. on huge capital items, than you can’t avail the above exemptions.
There could be N numbers of your problems, so I will suggest to go for the basic reasons.
Seniors can put more light on the matter.
From India, Delhi
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There are different rules / laws applicable to different categoties.
Your concern related to laws in favor of a company. In some cases there are exemptions to start ups, like if a new establishment facing loses than company is not bound to pay Bonus (applicable only for first 05 accounting year).
The HR role can be vital by recruiting and deploying adequate employee as per company budget. If any employee want to go legally with mutual understanding than it is fine (unless any employee lodge complaint for delayed salary and other compliance).
If you are not making profit than need not to pay income tax and even you can carry forward your loses as per the Income Tax Act, so that when you will start earning profit than first adjust your initial loses than only liable to pay Income Tax.
It seems your concern is related to Fund Crisis. Pls be noted facing loses and facing fund crisis are different scenario. If the fund crises is related to non collection from client or making exp. on huge capital items, than you can’t avail the above exemptions.
There could be N numbers of your problems, so I will suggest to go for the basic reasons.
Seniors can put more light on the matter.
From India, Delhi
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Sir,
It is a fund crisis. The clients have not released payments to us on time, citing some issue of theirs. As and when we get funds, we are paying off resources. But when we don't get paid on time, what can the company do?
If an employee starts demanding bank interest that would have been paid to her by the bank if we hadn't delayed the salary, and asks the company to pay that interest or legal action will be taken, what kind of right path is that? I am not able to understand where the big issue lies to create chaos. The salary is only delayed by a month/30 days. It's not like it has been stopped entirely.
From India, Bengaluru
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It is a fund crisis. The clients have not released payments to us on time, citing some issue of theirs. As and when we get funds, we are paying off resources. But when we don't get paid on time, what can the company do?
If an employee starts demanding bank interest that would have been paid to her by the bank if we hadn't delayed the salary, and asks the company to pay that interest or legal action will be taken, what kind of right path is that? I am not able to understand where the big issue lies to create chaos. The salary is only delayed by a month/30 days. It's not like it has been stopped entirely.
From India, Bengaluru
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Dear Aishwarya,
In today's dynamic market scenario, after completing the operational part (successful service/material delivery), it is equally important to collect funds promptly. It is a common practice for many establishments to seek optimized services from startups and delay their payments by citing trivial issues.
The most reliable and best solution is to obtain a Bank OD and ensure timely payment of employee salaries. This practice will enhance the company's reputation among its employees. As soon as funds are available, make the OD current. By doing so, you will only incur interest for a limited period. When providing quotes, include an additional amount in your costing as "Finance Charges" (representing the interest borne on the Bank OD during the interim period).
Alternatively, you can delay payments to your vendors (related to operations, marketing, administration, etc.). Strengthen your product/service contracts according to client requirements to prevent clients from raising trivial concerns. Ensure that clients adhere to agreed-upon payment terms.
Your perspective may be biased towards the employer, considering "Delayed salary" a minor issue. However, for employees, receiving their monthly salary on time is a fundamental right and a legal obligation for the employer.
Explore other opportunities for cost optimization and establish an effective fund flow system to navigate challenging situations. I hope you find my points agreeable. Senior management can provide further insights on this matter.
Kind regards,
[Your Name]
From India, Delhi
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In today's dynamic market scenario, after completing the operational part (successful service/material delivery), it is equally important to collect funds promptly. It is a common practice for many establishments to seek optimized services from startups and delay their payments by citing trivial issues.
The most reliable and best solution is to obtain a Bank OD and ensure timely payment of employee salaries. This practice will enhance the company's reputation among its employees. As soon as funds are available, make the OD current. By doing so, you will only incur interest for a limited period. When providing quotes, include an additional amount in your costing as "Finance Charges" (representing the interest borne on the Bank OD during the interim period).
Alternatively, you can delay payments to your vendors (related to operations, marketing, administration, etc.). Strengthen your product/service contracts according to client requirements to prevent clients from raising trivial concerns. Ensure that clients adhere to agreed-upon payment terms.
Your perspective may be biased towards the employer, considering "Delayed salary" a minor issue. However, for employees, receiving their monthly salary on time is a fundamental right and a legal obligation for the employer.
Explore other opportunities for cost optimization and establish an effective fund flow system to navigate challenging situations. I hope you find my points agreeable. Senior management can provide further insights on this matter.
Kind regards,
[Your Name]
From India, Delhi
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