Especially during the pandemic, employer–employee relations have been strained. Many employers struggle to meet their obligations to employees and either delay or fail to pay wages. In these cases, the question of what to do when a salary is delayed becomes important.
What to Do When Wages Are Not Paid on Time
Due to the economic slowdown and the coronavirus outbreak, many businesses have reduced their operations, causing employees to experience difficulty receiving their pay. Employers likewise may face obstacles in paying salaries and other entitlements. Because a monthly wage is a primary source of income for workers, the law provides protections. Payment of wages is considered a fundamental right under labor law and a primary obligation for employers.
Unless an individual or collective employment agreement states otherwise, wages must generally be paid at the end of each month. When an employee does not receive their salary, their legal rights come into play. Under Article 24 of the Labor Law, if an employer has not calculated or paid the employee’s wage in accordance with the contract terms, the employee is entitled to terminate the contract for good cause and may be eligible for severance pay. The law defines wages as the monetary amount paid by the employer to the worker in return for their work, and wages must be paid in money.
What Can an Employee Do If Wages Are Not Paid?
An employee whose wage is unpaid can claim the owed amount from the employer through a lawsuit or enforcement proceedings while continuing to work. However, pursuing such remedies during ongoing employment may negatively affect workplace continuity. For this reason, an employee may immediately terminate the employment contract for just cause without issuing a prior warning. Partial payment of wages does not invalidate the right to terminate; even if the majority of a salary has been paid, the employee can still terminate to recover the full contractually agreed amount. Wages cover not only base salary but also items such as bonuses, fuel or clothing allowances, overtime, weekly rest pay and public holiday pay. Failure to pay any of these entitlements also gives the employee grounds to terminate.
To claim unpaid wages, the employee must request the amount specified in the employment contract. If the employer and employee agree on a different amount in practice but the contract specifies another amount and the employer pays the contractual amount, the employee generally does not have the right to terminate on that basis.
No Requirement to Serve a Warning
If the employer fails to pay the employee’s wage within twenty days without a compelling reason, the employee has the right to refrain from working. When employees exercise that right based on their own decision, and the action takes on a collective character, it is not regarded as a strike. Employment contracts cannot be terminated on the ground that employees did not work for this reason. Likewise, an employer may not replace employees who do not come to work because their wages were not paid, and the specific tasks performed by that employee should not simply be reassigned to others.
There is no obligation for the employee to issue a prior warning before terminating the employment contract. If the employee chooses to terminate, they are not required to continue attending the workplace; they may effect the termination by not coming to work, which is known as an active or conduct-based resignation. For workers paid per piece or per task, if the employer pays a lower rate than agreed, the employer must pay the difference. If the wage difference is not fully paid, termination is also possible. Termination on these grounds can give rise to compensation and entitlement to unemployment benefits.