Can Company Deduct Employees' Salary If It Is In Losses?

My company is currently running in Loss, so the company is deducting 2 days salary, is this correct? Can a company do this?

Answers (2)

Shagun Srivastava

Shagun Srivastava

  • Sector-1, Noida

Indian law allows an employer to make deductions from an employee's salary, but only if he or she agrees to it in writing. The loss or damage must have occurred in the course of employment. The loss or damage must have been as a result of the fault of the employee.

Answered on 27 Mar 2020


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Arshi Noor

Arshi Noor

  • Sector-1, Noida

Indian law allows an employer to make deductions from an employee's salary, but only if he or she agrees to it in writing. The loss or damage must have occurred in the course of employment. The loss or damage must have been as a result of the fault of the employee YES! They can! As per various laws in place in India, they can definitely do that, but for that, they need a court order if your agreement does not contain the clause. So, just to not to get to court and for ease of things, companies these days add a clause that states that “In case of any loss to the company by a mistake of an employee which is due to the improper conduct or shortcomings on part of the employee, they are liable to recover the damages from the employee” in the Employment Contract.

Answered on 26 Mar 2020


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