What is Salary on Hold? | Meaning & Definition | Akrivia HCM

Salary on hold is when an individual’s regular salary payment has been temporarily suspended or delayed for some reason. There could be various reasons for placing a salary on hold, such as financial difficulties the employer faces, company restructuring, contractual disputes, or an investigation into potential misconduct.

Employees may not receive their usual compensation on the scheduled payday when a salary is on hold. Depending on the circumstances, the hold can last for a short period. 

According to the employment agreement, employers may also hold employees’ salaries if they have not served their notice period.

The company can put new employees’ salaries on hold when their profile is not confirmed or the verification process is incomplete. However, this does not affect salary processing.

What are the reasons behind the salary on hold?

There are some reasons why an employer might put an employee’s salary on hold. Some of the most common reasons include:

• If employees are consistently underperforming, their employer may put their salary on hold to motivate them to improve.
• If an employee is disciplined for misconduct, their employer may put their salary on hold as a punishment.
• The employee who takes a leave of absence, their salary be put on hold until they return to work.
•  If an employer is experiencing financial difficulties, they may put employee salaries on hold to save money.
• An employer may require to put an employee’s salary on hold due to legal requirements if the employee is to investigate for fraud.