Top reasons for Salary Delay and how to react to them

Top Reasons for Salary Delay & How to react to them

Salary Delay

Have you ever found yourself anxiously checking your bank account, waiting for salary to be credited, only to disappointed that it hasn’t come on time? Many of us would have gone through this frustrating experience, unsure of what to do next.

Even a few days of delay could create problems in the life of any salaried person. In this blog, we’ll discuss the reasons why salary might get delayed and what can be done to deal with this problem.

When does a company delay salary?

No company delays their employees’ salary without any major reason. It not only disrupts employees’ personal lives but also creates an environment of anxiety in the company. And this can impact productivity in the company.

Here are some possible reasons why salary delays happen:

1. Technical glitch or operational error

Sometimes, the reason behind a salary delay could simply be an error by the admin team or some issue from the bank’s end.

2. The company is facing a cash crunch

Usually, companies maintain a pool of money to avoid this problem but there could be reasons like heavy investments, cash inflow at a standstill, etc that can lead to salary delay.

3. The company is going through a rough phase

A company might delay salaries if they have incurred unforeseen losses and is unable to maintain adequate cash balance.

4. The whole sector is facing a hard time

When a sector goes through a bad phase, companies try to maintain as much liquidity as they can to survive till everything comes back on track. In such times, salary delays become more frequent to manage cashflow.

5. Catastrophes like pandemic, recession, etc

Such adversities lead to cash flow problems, reduced sales, operational issues, etc and have significant impact on the financial health of companies, leading to salary delays of employees.

6. The company goes bankrupt

A company is declared as bankrupt when they are unable to repay its creditors and fulfil its financial obligations.

If a company goes bankrupt, the employees may or may not receive their salaries, depending on factors like the type of bankruptcy, employment contracts, and status of the company’s assets. When facing a salary delay, it is natural to feel worried. But it’s important to stay calm as panic can lead to hasty decisions which might not be in your best interest.

Your action towards this problem should depend on things like:

Number of days or months of salary delay

Your company’s attitude and response

Your financial situation (debts, savings, financial obligations, etc)

How to deal with a salary delay?

Here are three things you can do in case of a salary delay:

1. Talk to your employer

It’s very important to have an open and honest conversation with your employer. You should express your concerns, ask for more information and enquire about when you can expect to receive your salary, etc.

It’s important to remain professional and respectful during the conversation. Your employer might also be going through a difficult time. It is always advisable to maintain a record of this communication over an email so that you have a record for future reference.

2. Send your company a demand notice

You can consider this step if you are still facing salary delay after talking to your organisation.

A demand notice is a legal document that is sent to an employer when an employee’s salary is delayed. It serves as a formal request for the payment of the salary that a company is liable to pay its employees. It establishes a formal record of the salary delay. This is helpful if the situation escalates into a legal dispute.

3. File official complaint

Before you take this step, make sure your salary has been delayed for a considerable amount of time and you’re able to establish that your employer is not willing to pay your due salary.

You can approach labour court if you earn less than Rs. 18,000 per month. A labour court is supposed to solve the case within just 3 months. In case your monthly salary exceeds Rs. 18,000, you have the option to pursue the matter through a civil court.

What to avoid in case of a salary delay

A delay in salary could get to your nerves but ensure that you don’t do anything that might impact your life or your career negatively. Here are a few things that employees end up doing in such situations which is a big no-no:

1. Do not do anything illegal

If you do anything illegal like blackmailing your employer or the company to give you the money. They could file criminal charges against you.

2. Do not go on a strike without a union

A strike without a union is considered illegal. Even a union strike can be deemed illegal if certain pre-conditions are not met.

3. Do not stop working just to create pressure on the company

If you stop working without resigning or serving your notice period, the company can take legal action against you.

In Conclusion

Your salary is your right, and you deserve to be paid on time and in full. In case of a delay, do the needful as per the situation but avoid any impulsive decision.

To handle cash crunch in such situations, you can always take instant loans from platforms like Zype and pay bills that cannot be delayed. Click here to know how you can activate your credit line with Zype in three simple steps so you can transfer cash in a single click whenever required.

We will leave you with this last piece of advice – Have money equivalent to six months of your salary in your emergency fund. This helps to soften the blow when such kind of a problem hits your life.

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