Labour Code: Under the Indian Labour Code, if your company fails to credit your salary by the 7th of the month, action can be taken against it. Let’s look at what the rules say.
Labour Code: Salaried employees usually have a designated payday when their salary is credited to their accounts. However, many private companies fail to credit salaries on time, causing difficulties for employees. If your company repeatedly does this, there is no need to worry; lodging a complaint under the Labour Code can provide immediate relief, and the manager could even face imprisonment.
Salary must be credited by the 7th
According to Section 17 of the Code on Wages, 2019, employees receiving a monthly salary must be paid before the end of the 7th day of the following month. For instance, if an employee worked in July, they should receive their July salary by the end of August 7th. Legal provisions exist to address situations where this does not happen.
Provision for fines
Action can be taken against a company if it fails to pay wages on time or pays less than the amount required by law. The law provides for a fine of up to ₹50,000 in such cases. This means that a first-time violation does not result in immediate imprisonment but rather a financial penalty.
Is there a provision for jail?
However, if an employer fails to rectify the error after receiving a financial penalty and commits the same offense again within five years, the punishment becomes more severe. In such cases, the penalty can include imprisonment for up to three months, a fine of up to ₹1 lakh, or both.
Key takeaway
The important point to understand here is that while paying the salary by the 7th is a legal requirement, the employer is not immediately sent to jail the very day the salary is missed. Before any action is taken, the matter is investigated, the nature of the violation is assessed, and due legal process is followed. Therefore, it is essential for both employees and employers to have a proper understanding of the rules regarding salary payments.
