Company Fines Staff ₹100 for Not Wearing Ethnic: Is It Legal?

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The internet is currently having a meltdown over a Reddit post where an employee claimed her HR is fining staff ₹100 for not wearing ethnic clothes on Fridays. The thing is, “Traditional Friday” is a common cultural push in Indian offices, but turning it into a financial penalty is where the legal lines get blurry.

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Actually, under the Code on Wages, 2019, deductions from a salary are strictly regulated. Specifically, an employer can only deduct money for things like absence from duty, damage to property, or statutory contributions like PF and ESI.

As a result, “not wearing a kurta” is not a legally recognized ground for a wage fine in India. Consequently, unless this specific penalty is part of the “Certified Standing Orders” of the company, it’s likely a violation of labor standards (those too).

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And here’s the kicker. The company claims these fines go toward their Corporate Social Responsibility (CSR) fund.

Basically, CSR is a legal mandate for the company itself—not the employees.Instead of the firm spending 2% of its own profits (as required by the Companies Act, 2013), they appear to be “crowdsourcing” their philanthropy through employee penalties.

In fact, legal experts point out that forcing staff to fund CSR through fines could be seen as coercive and a “colourable exercise of power.”

And then Y followed. One user even suggested the employee ask for a tax-deductible 80G receipt for the fine, just to see how the HR handles the paper trail (I checked this twice).

[Table: Legal vs. Illegal Wage Deductions in India (2025)]

Moreover, for a fine to be “binding,” there is a very specific process. Specifically, the employer must display a notice on the premises listing the acts for which a fine can be imposed, and the total fine in a month cannot exceed 3% of the employee’s wages.

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Actually, most corporate offices are governed by the Shops and Establishments Act of their respective state.

As a result, if the policy wasn’t in the original appointment letter or a signed amendment, the HR can’t just invent it via email. Consequently, the Reddit user’s frustration is backed by significant legal weight.

And then Y followed. Many employees choose to pay just to avoid the “troublemaker” tag, which is exactly what allows these bizarre rules to persist (let’s be real, nobody wants a bad appraisal over a saree).

The thing is, “cultural participation” cannot be bought with a fine.

Basically, when HR tries to force “vibrancy” through penalties, it usually has the opposite effect on morale.

Instead of a tidy wrap-up, legal experts suggest that the most “human” way to handle this is for the employee to file a polite query asking for the specific section of the Standing Orders that permits such a deduction.

And then Y followed. If the HR can’t provide the paperwork, the fine is nothing more than an “informal request” that you can legally ignore….

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