Article: The Counsellor: Deducting pending dues from salaries of employees

Employee Relations

The Counsellor: Deducting pending dues from salaries of employees

What should an organisation do in a case where an important deduction has been missed
The Counsellor: Deducting pending dues from salaries of employees

Vivek Paranjpe, Consultant & Strategic HR Advisor to Reliance Industries answers professional and ethical dilemmas faced by our readers at their workplace.

Question: Our company provides child care to its employees at Rs. 5000 per month. However, at the recent HR audit we were shocked to realize that the Rs.5000 per month charge that we had to deduct from the employees’ salary had not been done for some 200 employees over the past 2.5 years. Our CEO is obviously furious and wants HR to act promptly to recover the money from the employees at the earliest. While no employee ever brought this up, I know that it is equally HR’s responsibility to have ensured such a blunder did not occur. Many of the employees have even left the organization and I have only joined recently. Personally I feel it would be unfair to suddenly ask employees to pay up such a huge amount while I understand my CEOs demand. What should I do, and who should take the blame?

Answer: I am unable to understand what kind of child care benefit is offered by your corporation that demands such a huge deduction of Rs. 5000 per month. In addition to such a deduction I am sure there are other deductions for Provident Fund and other benefits. Looking at such a large monthly deduction only on one count, I will like to believe that this group is a group of very well paid employees.
I am wondering if the management for some reasons forgot to make such deductions. How is it that these employees, from whose salary such large deductions should have happened, did not bring it to the management’s notice? I guess the employees are equally responsible. While it is necessary to fix the blame, it is more important to ensure existence of robust processes with checks and balances to ensure smooth administration and non repetition of similar mistakes.
Looks like now these employees owe close to 1.5 lakhs each to the company for that period of 2.5 years. It is difficult to recover such big amount from the monthly salary. There are several ways of dealing with this - just adjust this money against future bonuses or incentives or treat the amount as loan and recover the same over longer reasonable period of time. You need to work out a reasonable and mutually acceptable mechanism for recovery. As far as ex-employees are concerned the recovery will be a challenge, you need to work with these people one-on-one and recover what is possible.

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Topics: Employee Relations

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