Salary Not Received or Full and Final Settlement Not Done from Company



Salary not received to Employee from Company after S/he resigned or Laid off or Terminated or Retired or you get separated from Organization for any reason. There are the following questions arise.

  1. What are the components of Salary or Legal dues you are eligible for?
  2. What to do? 
  3. Whom to connect with?
  4. How will you get it?
  5. How much compensation company is liable for?
  6. If Company says you will get your salary in 45 days or 60 days or whatever, is it justified?
  7. What are all conditions you are not eligible for the dues?

1. What are the components of Salary or Legal dues you are eligible for?

Following are the components you are eligible for-

  • Unpaid Salary - Monthly Unpaid Salary you worked for.
  • Expenses or Allowance or Reimbursement - Any expenses or allowance or reimbursement incurred during your employment. Such as Laptop Allowance, Travel Reimbursement, Mobile Allowance, Internet Allowance, etc. The amount will be actual or calculated on a Pro-Rata basis.
  • Bonus-If your company is registered and it has been 5 years and the Employment Period of an employee is more than 30 days. The minimum amount will be 8.33% of the Annual Basic Salary and a maximum of 20% of the Annual Basic Salary. Calculated on a Pro-Rata Basis.
  • Leave Encashment - Leave Encashment of all balance Paid or Privilege or Earned Leave which you have accumulated in your employment period. To be eligible for it, your minimum employment period in Delhi should be 4 months. For other states, it can be 240 days to 1 year, which one needs to check as per State Shop & Establishment Act. For example- If you are in Haryana- check in Haryana Shop & Establishment Act. The calculation for every 20 days of working including week offs, holiday, etc you get 1 paid leave. For illustration, If an employee joined on 1st of Aug, then on 20th Aug s/he is eligible for at least 1 Paid Leave.    
  • Incentive or Performance Bonus - Incentive or Performance Bonus, you are eligible the day you achieved it. No matter you have resigned from the organization or been terminated or retire or you get separated from Organization for any reason. The amount calculation is as per the incentive circular.
  • Overtime- You are eligible if you have worked more than 48 hours in a week and you are an employee. Doesn't matter you are a worker and working on daily wages. Amount calculation for one hour overtime is Monthly Gross Salary divide by 26, divide by 8, multiplied by 2. For illustration, if an employee Gross Salary is 26000/-, so one hour overtime is [{(26000/26)/8}*2] = 250]
  • Notice Period- It is the amount paid to employees as per their appointment letter or offer letter.
  • Miscellaneous- It can be any amount to which you are eligible as per organization policy.

2. What to do? 

Once you are separated from the organization for any reason whether it is resignation/termination/retirement/laid off. Firstly, you have to complete the exit formalities and hand over the company property, and take the receiving from HR or from your manager or the person you have handed over the property. Then take NOC from the organization once you submit all the documents and properties.

3. Whom to connect with? 

You have to email your manager and HR or send a registry post from the Post office mentioning that salary or F&F has not been dispursed yet. If it is not been disbursed within the Said period.If no response from an organization or still delaying the payment then contact the labor office of your location. And filed a written complaint addressing the Assistant Labour Commissioner within 3 months from the date you have been separated. 

4. How will you get it?

Once, you filed a written complaint then it is processed and put in mediation, and payment is processed within 2/3 months not more than the date you filed a complaint. Else lodge a case against your employer under the Payment of Wages Act,1936 to the labor court, where you filed a complaint. 

5. How much compensation the company is liable for? 

Once you filed a case then Authority can issue the order in which minimum compensation is ₹1500/- and the maximum is 10 times the amount which is unpaid by your employer. "Under Section 15(3) of Payment of Wages Act,1936."

6. If Company says you will get your salary in 45 days or 60 days or whatever, is it justified? 

As per the Payment of Wages Act,1936. If the company terminates or laid off the employee then the company should clear all legal dues or F&F on the Last working day. If you resign or retire, then the company can take the period but it should be mentioned in your appointment or offer letter. 

7. What are all conditions you are not eligible for the dues? 

If you have been caught cheating, stealing, or any such criminal activity or you have made blunders and caused an organization a heavy loss. Then you are eligible only for unpaid salary, reimbursement/allowance, and leave encashment. Rest all depends upon company policy and its own sole discretion, whether they want to pay you or not.


I hope, it will clear all your doubt regarding the settlement from the organization. Please share the blog for better reach and benefits who really need it.

Link for Payment of Wages Act,1936.

https://labour.gov.in/sites/default/files/ThePaymentofWagesAct1936_0.pdf 

 

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