The Payment of Wages Act, 1936, ensures that employees get their salaries on time. However, if the employer denies or delays the payment of salary or wages to the employee or worker, then the employee or worker is entitled to interest on the amount to be paid for delay in providing the wages or salary. The employee then has the option of sending a legal notice to the employer for the payment of salary. A certain list of documents that are required while sending a legal notice to the employer if you are wondering what to do if the company is not giving salary :
- Proof of unpaid salary through bank statements, etc.
- Appointment letter
- Details of your salary, benefits, pay, and perks
- Copy of Employment Contract
Upon receiving the Legal Notice from his employee, the employer must pay the unpaid dues with interest to the employee. However, if the employer refuses or fails to do so, then further legal remedies such as Insolvency and Bankruptcy Mode, Arbitration and Mediation, and the lawsuit can be opted by the employee for the recovery of dues.
Filing of Lawsuit
The employee can file two types of suits under the law for the non-payment of salary-:
Civil Suit: an employee can file a civil suit under the Civil Procedure Code. Typically, the employee is required to send a legal notice demanding payment of dues to the employer. If the employer refuses or fails to do so the employee can initiate legal proceedings against the company. As per order 37 of the Civil Procedure Code, you may file a summary suit before the District Court. After filing a suit, summon is issued, and the employer has a period of 10 days to appear before the court. In case the employer fails to appear, then the decision is made in favor of the employee. The employee also must have some proof of employment and must mandatorily file a suit within three years from the date when the salary was due to him.
Criminal Suit: It is the liability of the employer to pay the salary to the employee on time. However, if he denies, refuses, or fails to do so, then the employee can file a criminal suit for cheating and breach of trust under Section 420 of the Indian Penal Code. The employer has paid the salary through a cheque, which has bounced and thereafter refuses, or denies making a fresh payment, then the employee can file a suit under the Negotiable Instruments Act, of 1881.
Post covid scenario and now in 2023 with so many technology companies firing their employees, it is clear that non-payment of salary can be a complex and challenging process, but employees have legal rights to take legal action against an employer for not paying salary. It is important for employees to be aware of their rights and to take timely action to protect them. Consulting with an experienced employment law attorney can be a helpful step in navigating the legal process and ensuring that all necessary steps are taken to obtain unpaid wages. Employers have a legal obligation to pay their employees on time, and failure to do so can have serious consequences. By asserting their Legal Notice and taking action to recover unpaid wages, employees can protect their financial stability and ensure fair treatment in the workplace.