What Should do If Employer do not pay salary on time?
Wages may be classed as an operating expense, but like any good investment, strong staff pay salary can deliver healthy returns. Your business may have a great product or service but the true strength of the firm lies with your people – and top talent deserves to be well remunerated. Salary levels are still a crucial element when it comes to attracting and retaining the best people. Quite simply, companies that do not offer competitive pay packets can put themselves out of contention when it comes to sourcing top talent.
As a small business, delaying payment to employees or not pay salary to terminated employees may be the first step you take when trying to save money. However, if you do not pay salary to your employees regularly not only does it negatively impact you but also the way that employees perceive your business.
Money helps to sustain your employees’ lives and is a driving force that impacts many of their choices outside of work. It is also a determining factor when they are choosing a place to work. Your employees are a crucial part of growing and sustaining your business, so if their income affects their security in any way, it’s going to impact their productivity. This means that their pay is directly related to the overall success of your business.
Having proper pay salary policies in place is a tangible way for a company to show its commitment in taking care of their people, and this is likely to be reciprocated if and when the business finds itself in tough times. A carefully constructed pay salary policy shows you are committed to your team, and this in itself can be a tremendous incentive for staff. Your concern for the wellbeing of your employees filters through to office morale and productivity, and will hopefully be reciprocated if the business finds itself facing tough times.
Why need to pay salary on time?
When your employees are not paid on time, they are more likely to quit and find another employer. The resulting cost of that employee leaving due to not being paid ends up being far greater than merely paying the employee in the first place. Below are just some of the costs to consider if you were to lose an employee and have to find another to replace them.
- Lost productivity – It may take a new employee several months to years to be as productive as their predecessor.
- Training costs – This includes training on new procedures or software.
- Workplace culture impact – Other employees might be affected by the high turnover rate.
- Hiring costs – This includes job advertisements and the time spent interviewing and screening potential applicants.
It is clear to see how heavily not pay salary your employees on time can impact your business. You should always have a business plan in place to ensure that your employees are paid on time, every time. The benefits of doing so far outweigh the potential repercussions. So do yourself and your employees a favor and have a sound financial foundation in place to guarantee the success of your business.
Step on Legal Action Due to Late Pay Salary in Malaysia
Employer must pay salary within 7 days after the last day of any wage period (usually a month). For example, if you receive your pay salary on the last day of the month, then your next salary should be in before the 7th of next month.
So, if this has been going on for a while now, it means that your employer has extremely violated the said section. Employee can have a talk with your management, OR if that doesn’t work, it’s time to take legal action.
- You can file a complaint by sending an official letter to the nearest Labour Department, email to jtksm@mohr.gov.my, visit the nearest local Labour Department office or call 03-8000 8000. We would suggest you prepare the letter and visit the office because you know – the government office and efficiency doesn’t get along well.
- Don’t forget to bring a copy of the supporting documents i.e. contract or appointment letter.
- After that, you will be advised to wait for further notice from the Labour Department (while they do their own investigation).
- The Labour Officer may contact the employer concerning your claim. If the employer accepts your claims and pays up, the matter is settled and you will withdraw the claim against him. If the employer disputes your claim, the Labour Officer will fix a date to hear your case in the Labour Court.
- Both parties are required to attend the hearing. The complainant would be informed by letter (may be registered letter) and a summons would be issued to the defendant i.e. the employer.
- You may choose to represent yourself, or by be represented by your trade union, by a lawyer or an official from the Malaysian Trades Union Congress (MTUC) – if you seek their help.
- At the end of the hearing, the Presiding Officer makes an order either orally or in writing. Any party not satisfied with the decision of the Presiding Officer can appeal to the High Court within 14 days from the date of the decision.
- If the defendant does not appeal to the High Court and does not want to obey the order of the Labour Court, the Labour Office will assist to enforce its Order in the Sessions Court in order to recover the money.
What should do If Employee Earns More than RM2K?
The Employment Act 1955 applies to employees defined as people who are earning less than RM2000 monthly. However, all is not lost. Section 2 of the Employment Act 1955 allows the Director General of Labour to settle disputes regarding wages for employees with monthly pay salary of up to RM5000. Also, if you’re a manual labourer, it doesn’t matter what your salary is.
The process is for you to make a claim is still the same until you and your employer can’t come into an agreement. This is when the Industrial Relations Department will get involved.
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