Non-payment of salary

Dear HR Community

One of our employees cleared all his/her vacation leave during the notice period.

This was done without getting prior approval from the reporting manager.

The manager has instructed us in the HR department to stop his/her salary payment as the staff cannot be contacted.

My question is whether the company can legally withhold the salary until the matter is resolved even though all employees are entitled to leave benefits.

We are in the education industry.

Thank you in advance for your views and comments.

Lisa


Does the company have the right to not pay the salary?

Yes: 23.08%

No: 53.85%

Perhaps: 9.23%

Not Sure: 13.85%


Comments


Need to release after what need to deduct and pay. – Jenny

Just treat it that staff have tendered and left. Still, we need to pay the salary and close the case. – Yvonne

The employee who took leave without approval for more than 2 days is considered AWOL. The employee has breached the contract and must pay notice in lieu to the employer. The employer is not required to encash his/her annual leave. – Ann

The employee has not violated any MOM terms for you to withhold his/her pay, so I will advise you not to do that as it will constitute your company withholding his/her pay without valid reason. I suggest paying what was supposed to but still trying your best to contact the person, letting him/her know that what they did was not responsible, and understanding his/her POV on why this happened.

Salary has to be paid. However, if the staff was absent from work for more than 2 working days continuously without approval, you can take it up as an AWOL case. – Mel

In accordance with the Employment Act, an employer must pay salary at least once a month and within 7 days after the end of the salary period. When an Employee resigns and serves the required notice period, Salary must be paid on the last day of employment. – Geetha

It depends. If the staff cleared the balance of leave she was entitled to and she did not overtake the leave, the company could hold the salary within the payout date. The company could use this time to trace her and hopefully could get some explanation. The company also has to check the clause stated in the staff’s employment letter. – Fidah


Additional Comments


In many cases, employees are entitled to take the vacation leave they have accrued, especially if it’s within their notice period and they have followed the proper procedures for requesting leave. If an employee has accrued vacation leave and followed company policies for requesting time off, their entitlement to that leave is usually protected by employment laws.

However, if the employee took vacation leave without getting the required approvals, this could be considered a violation of company policies. In such cases, the company might have the right to take disciplinary actions or withhold pay for the period of unapproved absence. It’s important for companies to have clear policies in place regarding leave approval procedures and consequences for violating those procedures.

If the employee has accrued leave entitlement and followed proper procedures, but the company wishes to address the issue of not receiving prior approval, it’s generally recommended to handle this through appropriate disciplinary channels rather than withholding pay. Withholding pay could potentially lead to legal disputes or claims for unpaid wages.

To prevent similar situations from happening in the future, HR executives can take several steps to ensure proper leave management and communication within the organization:

Clear Leave Policies and Procedures: Establish well-defined leave policies and procedures that outline the process for requesting and approving leaves. Make sure all employees are aware of these policies and where to find them.

Training and Communication: Conduct regular training sessions to educate both employees and managers about the leave policies and procedures. Clear communication helps everyone understand their rights and responsibilities.

Approval Workflow: Implement a clear and standardized approval workflow for leave requests. Ensure that employees know who needs to approve their leave and what steps they need to follow to obtain approval.

Documentation: Require employees to submit leave requests in writing or through a designated system. This creates a paper trail for approvals and provides evidence in case of disputes.

Manager Training: Train managers on their role in the leave approval process. Make sure they understand their responsibility to review and approve leave requests promptly.

Automated Systems: Implement a leave management system that allows employees to request leave electronically and notify managers for approval. This reduces the likelihood of miscommunication or unapproved leave.

Escalation Process: Establish an escalation process for cases where an employee’s manager is not available to approve a leave request. This ensures that there’s a way to handle situations where immediate approval is needed.

Reporting and Monitoring: Regularly monitor and analyze leave data to identify patterns or issues. This can help HR executives proactively address any problems and take necessary actions.

Feedback Mechanism: Create a feedback mechanism where employees can provide input on the leave management process. This can help identify areas for improvement and address concerns.

Consequences for Violations: Clearly communicate the consequences of not following leave policies, including unapproved leave. This can act as a deterrent for employees who might consider taking leave without approval.

Exit Procedures: During an employee’s exit process, ensure that they understand their responsibilities for clearing pending leaves and obtaining proper approvals before their last working day.

Legal Compliance: Keep up-to-date with employment laws and regulations related to leave entitlements in your jurisdiction. Ensure that your organization’s policies are compliant with these laws.

Consistent Enforcement: Apply the leave policies consistently across all employees and departments to avoid perceptions of favoritism or unfair treatment.

Remember, every organization is unique, so it’s important to tailor these strategies to fit your company’s culture and specific needs. Regularly review and update your leave management processes to adapt to changing circumstances and lessons learned from past experiences.


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