InvestorQ : For companies that have shut down operations during the lockdown, is there a legal obligation to pay salaries to employees?
Rutuja Nigam made post

For companies that have shut down operations during the lockdown, is there a legal obligation to pay salaries to employees?

Answer
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Arti Chavan answered.
5 months ago


The central and state governments have urged employers to pay wages for the lockdown period. This is applicable not only to the permanent workers but also to contract and migrant workers. What employees need to realize is that there is no such obligation on the employer and it is outside the scope of the Disaster Management Act. It is also a grey area whether such an obligation should be that of private employers or that of the State. Government has invoked provisions of the Disaster Management Act 2005 (DMA, 2005) to direct employers to pay wages to all the workmen but this neither comes within the framework of the DMA and EDA nor is backed by a statutory law. Incidentally, the powers have not been vested with either the State or the Central Government to direct private employers to pay wages during a disaster despite the employees not working. The only recourse is the Industrial Disputes Act, but that will also apply only in case of lay-offs.