Non- Payment of Salary Notice

What is a Non-Payment of Salary Notice? 

A legal notice for Non-Payment of Salary is a formal document sent by an employee to an employer or company, demanding the release of unpaid salary or dues. It serves as an official reminder and pre-legal action communication, giving the employer a chance to clear the outstanding salary before the employee approaches to labor authorities or take legal actions. 

This notice is often the first step in asserting the employee’s legal right to timely and full payment of salary as per the employment contract and applicable labor laws. 

What Does a Legal Notice for Unpaid Salary Include? 

A well-drafted salary recovery notice should outline the employee’s rights and address any salary dispute. Key details include:

• Employee and employer details- Full name, designation, company name, address. 
• Employment period- Duration of service with date of joining and exit (if applicable). 
• Outstanding amount- Monthly salary, bonuses, or final settlement of dues pending. 
• Reference to employment contract or offer letter. 
• Previous reminders- Mention prior to follow- ups and responses (or lack thereof). 
• Demand for payment- A clear deadline (7- 5 days) to transfer the amount. 
• Legal warning- State that non-compliance may lead to legal action before labor or civil forums. 

Attachments may include salary slips, appointment letters, resignation acceptance, bank statements, and written communication with the employer. 

When to Send a Non-Payment of Salary Notice to Your Employer?

You should send a lawyer-drafted notice for unpaid salary when legal action might be required. Send it to your employer when:

• You have not received your salary for over 15 to 30 days past the due date, creating a salary dispute.
• Employee reminders to HR, finance, or reporting managers have been ignored by the company. 
• You have resigned or been terminated, but final payment remain unpaid. 
• Your employer has illegally withheld wages, commissions, or incentives, violating labor laws. 
• You want to create formal legal proof of the demand before approaching labor authorities or courts. 

These issues are common in salary disputes, which is why knowing what to do if your employer is not paying salary is important.

Common Reasons Employees Send a Legal Notice for Unpaid Salary

Employees typically send a legal notice for unpaid salary in the following cases:

• Full or partial salary has not been paid for one or more months. 
• Final settlement or pending dues have not been cleared after resignation or termination. 
• Unpaid performance incentives, bonuses, or commissions are withheld without reason. 
• Employer has deducted amounts unlawfully from salary (e.g., penalties or adjustments not agreed upon). 
• Salary is being delayed regularly, affecting financial stability. 
• No proper communication or response has been given by HR or management despite follow-ups. 

Consequences of Ignoring a Non-Payment of Salary Notice 

If the employer fails to respond or release the pending salary:

• The employee may escalate the matter through legal action or labor authorities.
• The employee can file a complaint before the Labour Commissioner or the Labour Court. 
• In some cases, civil recovery suits can be filed in court for breach of contract. 
• Company directors or HR heads may be summoned for violation of labor laws. 
• Continued non-payment may lead to penalties, compensation, or prosecution of the employer. 
• Negative publicity or online reviews may affect the employer's brand reputation and credibility. 

Governing Laws 

The employer may face consequences under the following laws: 

• Payment of Wages Act, 1936- For unlawful or delayed salary payments. 
• Industrial Disputes Act, 1947- For wrongful withholding of wages in certain categories. 
• Shops and Establishments Act (State-specific)- For companies in the private/commercial sector. 
• The Code on Wages, 2019- Consolidated law ensuring fair payment and regularity. 
• Indian Contract Act, 1872- For breach of employment contracts in civil court. 

Delays or denial of salary without lawful justification can attract penalties, interest, and legal orders for compensation. 

FAQs Related to Non- Payment of Salary