Introduction
If your employer has not paid your salary, you can make a written demand and then file a wage claim under Section 45 of the Code on Wages, 2019, which has been in force since 21 November 2025. Monthly wages are generally due before the end of the seventh day of the following month, and wages payable on resignation, dismissal, removal or retrenchment are due within two working days. The claims authority can order payment of the amount due together with compensation of up to ten times that amount, and a claim can generally be filed within three years.
The right remedy depends on who you are and what is unpaid. A Section 45 claim covers amounts due under the Code, but contractual incentives, notice pay, gratuity, provident fund and dues from a company in insolvency each have their own legal route. This article explains when salary becomes due, what an employer may lawfully deduct, how to send a legal notice, how to file a wage claim and what to do in special situations such as a company shutdown or a notice-period dispute.
Salary Not Paid by Employer: What Should You Do First?
If your salary is overdue, start by recording exactly what is unpaid, when it became due and what the employer has said about the delay. Then make a written demand. If the employer still does not pay, the next step can be a claim under the Code on Wages, 2019 or another legal route that fits your employment status and the type of money claimed.
- Work out the exact amount. List each unpaid month or part-month, the components involved and the date on which each amount fell due.
- Raise it in writing with HR or the employer. An email or letter creates a dated record of the demand and of the employer’s explanation.
- Send a formal demand or legal notice. State the amount, the statutory basis and a payment deadline, and send it by a method that proves delivery.
- File a wage claim under Section 45. Approach the claims authority notified by the State or Central Government for your establishment.
- Use the other routes where they fit. A civil suit, the industrial-dispute machinery, the State Shops and Establishments authority, EPFO or the insolvency process may apply depending on the facts.
| Question | Current position |
|---|---|
| Main central law | Code on Wages, 2019, in force from 21 November 2025 |
| When is monthly salary due? | Before the expiry of the seventh day of the following month (Section 17) |
| When are wages due after resignation or removal? | Within two working days (Section 17(2)) |
| Where is a wage claim filed? | Before the claims authority appointed under Section 45 |
| Time limit for a wage claim | Generally three years from the date the claim arose |
| Maximum compensation | Up to ten times the claim determined (Section 45(2)) |
| Penalty for paying less than the amount due | Fine up to ₹50,000 for a first offence (Section 54) |
The Code on Wages has applied from 21 November 2025. The Ministry of Labour and Employment says the old rules continue during the transition until the new rules are finally notified, to the extent they are consistent with the Codes. The practical filing form and authority can therefore still depend on the State and the establishment.
Which Law Applies to Unpaid Salary Since 21 November 2025?
The Code on Wages, 2019 brought together the Payment of Wages Act, 1936, the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965 and the Equal Remuneration Act, 1976. The four Labour Codes were brought into force from 21 November 2025.
One major change for salaried staff is the broader definition of employee. Section 2(k) covers people doing skilled, semi-skilled, unskilled, manual, operational, supervisory, managerial, administrative, technical or clerical work for wages. The definition does not contain the old ₹24,000 monthly ceiling that existed under the Payment of Wages Act.
| Earlier law | Position now | What it means for a salary claim |
|---|---|---|
| Payment of Wages Act, 1936 | Subsumed in the Code on Wages, 2019 | The wage ceiling for coverage has gone. The Code’s employee definition includes managerial and administrative staff. |
| Minimum Wages Act, 1948 | Subsumed in the Code on Wages, 2019 | Claims for payment below the minimum wage go to the same Section 45 authority. |
| Payment of Bonus Act, 1965 | Subsumed in the Code on Wages, 2019 | Statutory bonus is governed by Chapter IV of the Code and is claimed under Section 45. |
| Equal Remuneration Act, 1976 | Subsumed in the Code on Wages, 2019 | Equal-pay claims for the same or similar work also fall under the Code. |
That does not mean every employment dispute must be filed before the wage authority. A Section 45 claim covers claims that arise under the Code, while some contractual amounts or disputes may require another forum.
When Does Salary Become Legally Due?
Section 16 of the Code fixes the wage period, which cannot exceed one month. Section 17 then sets the outer date for payment for each type of wage period.
| Wage period | Outer date for payment under Section 17 |
|---|---|
| Daily | At the end of the shift |
| Weekly | On the last working day of the week, before the weekly holiday |
| Fortnightly | Before the end of the second day after the end of the fortnight |
| Monthly | Before the expiry of the seventh day of the following month |
| On removal, dismissal, retrenchment, resignation or closure | Within two working days (Section 17(2)) |
Example: if the wage month is August and the employee is paid monthly, the Code sets the outer date as the end of 7 September. From the following day, the wages are overdue under Section 17, subject to any different time limit that another law may validly provide.
For an employee who resigns, the Code uses a different rule. Wages payable under the Code are due within two working days of the resignation. A company handbook that says every final settlement takes 45 or 60 days does not by itself replace the statutory wage-payment rule, although other parts of a final settlement can be governed by separate laws, contracts or State rules.
What Counts as Wages Under the Code on Wages?
The statutory definition in Section 2(y) starts with basic pay, dearness allowance and retaining allowance. It then lists the components that are excluded, and adds a balancing rule: where the excluded components cross the percentage stated in the Code, the excess is added back into wages for statutory calculations.
| Component | Treatment under Section 2(y) |
|---|---|
| Basic pay, dearness allowance and retaining allowance | Included in wages |
| House rent allowance, conveyance allowance, overtime allowance and commission | Excluded, subject to the one-half rule |
| Bonus that does not form part of remuneration under the terms of employment | Excluded, subject to the one-half rule |
| Employer’s provident fund or pension contribution; value of housing, light, water or medical facilities | Excluded, subject to the one-half rule |
| Gratuity, retrenchment compensation, retirement benefits and ex gratia payments | Excluded |
| Excluded components in clauses (a) to (i) that exceed one-half of total remuneration | The excess is deemed to be wages and is added back |
The Ministry of Labour and Employment clarified in its 2026 Labour Code FAQ that the 50% rule applies across the four Labour Codes for statutory calculations. Its examples also state that performance-based incentives, ESOPs, variable components and reimbursement-based payments are not included in the statutory wages definition in the same way as basic pay and dearness allowance.
This matters because a payslip may show a large CTC figure that is not the same as the amount recoverable as statutory wages under Section 45. Contractual incentives, reimbursements and other components may have to be claimed under the employment contract or a different legal route.
Can an Employer Deduct Salary?
An employer cannot simply deduct any amount it wants. Section 18 allows only deductions authorised by the Code, and the total deductions in a wage period are generally capped at 50% of wages under Section 18(3).
| Deduction | Position under the Code on Wages |
|---|---|
| Fines | Permitted only for acts or omissions on the approved list, after the employee is given an opportunity to show cause, and within the limits in Section 19. |
| Absence from duty | Permitted in proportion to the period of absence under Section 20. |
| Damage to or loss of goods or money entrusted to the employee | Permitted only where the loss is directly attributable to the employee’s neglect or default, after a hearing, and not beyond the amount of the loss (Section 21). |
| House accommodation, amenities and services supplied by the employer | Permitted where the employee has accepted them, and not beyond their value. |
| Recovery of advances, loans and over-payments | Permitted subject to the rules on advances and loans in Sections 22 and 23. |
| Income tax, court orders, provident fund, cooperative society and authorised trade union dues | Permitted as statutory or authorised deductions. |
| Notice-pay set-off or any deduction not listed in Section 18 | Not in the list of authorised deductions. Whether a contractual amount can be set off against earned wages depends on the contract, the nature of the deduction and the forum hearing the dispute. |
This becomes important when an employer says that salary will be withheld because an employee did not complete the notice period. A notice-pay claim can arise from the employment contract, but that does not automatically turn all earned salary into a forfeitable amount. Whether a contractual amount can be set off against wages depends on the contract, the nature of the deduction and the forum hearing the dispute.
Full and Final Settlement: What Should Be Paid?
A full and final settlement is not one single statutory payment. It can contain several different items, and each can have a different legal source and deadline.
| Component | Legal source | Timing |
|---|---|---|
| Salary up to the last working day | Code on Wages, 2019, Section 17(2) | Within two working days of resignation, dismissal, removal or retrenchment |
| Refund of unauthorised deductions | Code on Wages, 2019, Section 18 | Claimed before the Section 45 authority |
| Leave encashment | Occupational Safety, Health and Working Conditions Code, 2020 (Section 32) for covered workers; the State Shops and Establishments law and the leave policy for others | Payable when employment ends; check the applicable rule and the contract |
| Statutory bonus | Code on Wages, 2019, Chapter IV | Within eight months from the close of the accounting year (Section 39) |
| Gratuity | Code on Social Security, 2020, Chapter V | Generally after five years of continuous service, subject to the statutory exceptions; payable within 30 days of becoming payable (Section 56) |
| Notice pay or pay in lieu of notice | Employment contract; Industrial Relations Code, 2020 for retrenchment of workers | As provided in the contract or the Code |
| Provident fund contributions | Code on Social Security, 2020 and the EPF scheme | Deposited every month; defaults are pursued through EPFO |
| Incentives, reimbursements and ESOPs | Employment contract or plan documents | As provided in the contract; recovered through a contractual or civil claim |
Separate the components instead of combining every unpaid amount into one figure. A component-wise statement makes it easier for the employer or the authority to identify what is actually due and under which law.
How to Send a Legal Notice for Unpaid Salary
A legal notice is not always a statutory precondition to a Section 45 wage claim. It is still useful because it creates a clear written record of the amount demanded and gives the employer an opportunity to resolve the dispute before formal proceedings.
A good salary-demand notice should contain:
- The employee and employer details, including the company’s registered office where available.
- The designation, joining date, agreed salary and relevant employment terms.
- The unpaid wage months or days, with a component-wise calculation.
- The dates on which salary was due and the dates on which reminders were sent.
- The statutory basis, including Sections 17, 18 and 45 of the Code on Wages where applicable.
- A clear deadline for payment and the bank account or payment method to be used.
- A statement that formal proceedings may follow if the amount is not paid.
Send the notice by a method that creates proof of delivery, such as registered post or speed post with acknowledgement, along with email to the official company address. Keep copies of the notice, attachments and delivery proof.
How to File a Wage Claim Under Section 45
Section 45 allows the appropriate Government to appoint an authority to hear and decide claims arising under the Code. An application can be filed by the employee, a registered trade union of which the employee is a member, or the Inspector-cum-Facilitator, subject to the statutory procedure.
| Stage | Rule under the Code on Wages |
|---|---|
| Who can apply | The employee, a registered trade union of which the employee is a member, or the Inspector-cum-Facilitator. A single application can cover several employees of the same employer. |
| Time limit | Three years from the date the claim arose. A later application can be admitted if the authority is satisfied that there was sufficient cause for the delay. |
| Hearing | The authority has the powers of a civil court for taking evidence, enforcing attendance of witnesses and compelling production of documents. |
| Order | Payment of the amount due, with compensation of up to ten times the claim determined (Section 45(2)). The authority is to endeavour to decide the claim within three months. |
| Recovery | If the employer does not pay, the authority issues a certificate of recovery to the Collector or District Magistrate, who recovers the amount as arrears of land revenue. |
| Appeal | An aggrieved party may appeal to the appellate authority within ninety days of the order (Section 49). |
For most private establishments, the relevant authority will be connected with the State labour administration. Establishments in the central sphere can fall under the Central Government machinery. Because the rules, forms and notified authorities may vary during the transition to the new Codes, check the relevant labour department before filing.
The ten-times compensation figure is a maximum, not an automatic payout. The authority decides the compensation on the facts of the case.
What Other Legal Routes Are Available?
| Route | Who it suits | Time limit and notes |
|---|---|---|
| Wage claim under Section 45, Code on Wages | Any employee under the Code, including managerial staff, for wages, deductions, bonus and minimum wages | Three years; compensation of up to ten times the claim |
| Civil suit | Contractual dues outside the Code, such as incentives or reimbursements | Three years from when the wages accrue due (Article 7, Limitation Act, 1963) |
| Industrial dispute under the Industrial Relations Code, 2020 | Workers as defined in the Code; excludes mainly managerial or administrative staff and supervisors above the wage threshold | Grievance redressal and conciliation usually come before the Tribunal |
| State Shops and Establishments law | Employees of shops and commercial establishments | Authority and procedure vary by State |
| EPFO | Unpaid or undeposited provident fund contributions | Separate from the wage claim; raised through the EPFO grievance portal |
| Insolvency process | Employees of a company in resolution or liquidation | Claims are proved before the resolution professional or liquidator; priority under Section 53 of the Insolvency and Bankruptcy Code |
1. Civil suit for contractual dues
A civil claim may be relevant where the amount is contractual and falls outside the statutory wage claim, or where the dispute requires a wider determination of contractual rights. Article 7 of the Limitation Act gives a three-year period for a suit for wages, running from when the wages accrue due. The exact cause of action and relief should be checked before filing.
2. Industrial dispute route for workers
The Industrial Relations Code applies to industrial disputes involving people who fall within its definition of worker. The definition excludes people employed mainly in managerial or administrative roles and supervisors drawing wages above ₹18,000 a month, subject to the Code and notified changes.
Where the facts fall within the industrial-dispute machinery, the dispute may move through grievance redressal and conciliation before the Industrial Tribunal route becomes relevant. This is a different route from a Section 45 wage claim and should not be presented as interchangeable for every employee.
3. State Shops and Establishments law
State Shops and Establishments laws can provide additional routes for wage and service-related complaints in shops and commercial establishments. The correct authority and procedure differ by State, so check the relevant labour department rather than assuming that the same form works everywhere.
4. EPFO for unpaid provident fund contributions
If salary was paid but PF contributions were deducted and not deposited, the issue is separate from the unpaid-salary claim. EPFO has its own grievance and assessment machinery. Keep the salary slip, UAN passbook and bank record together when raising the complaint.
5. Insolvency proceedings when the company is in financial distress
Employees can have claims in insolvency proceedings, but the route depends on whether the company is in the corporate insolvency resolution process or liquidation. A personal Section 9 insolvency application by an employee is only realistic where the statutory conditions and default threshold are met. For an already-open insolvency or liquidation process, the employee normally proves the claim in the form and manner prescribed by the insolvency process. In liquidation, employee and workmen dues receive the priority provided by Section 53 of the Insolvency and Bankruptcy Code.
Should You File a Police Complaint for Unpaid Salary?
Non-payment of salary by itself is ordinarily handled through labour, contractual or civil remedies. A criminal case requires a separate legal basis and facts; a simple failure to pay on time does not automatically become cheating.
A different issue can arise when an employer deducts an employee’s statutory social-security contribution and does not deposit it. The Code on Social Security contains separate offences and penalties for contribution defaults, including stricter punishment where an employee contribution has been deducted and not remitted.
What Penalties Can an Employer Face?
| Offence | Provision | Possible punishment |
|---|---|---|
| Paying an employee less than the amount due under the Code | Section 54(1)(a) | Fine up to ₹50,000. |
| Same offence again within five years of the earlier conviction | Section 54(1)(b) | Imprisonment up to three months, fine up to ₹1 lakh, or both. |
| Contravening any other provision of the Code or the rules | Section 54(1)(c) | Fine up to ₹20,000. |
| Repeat of such a contravention within five years | Section 54(1)(d) | Imprisonment up to one month, fine up to ₹40,000, or both. |
| Non-maintenance or improper maintenance of records | Section 54(2) | Fine up to ₹10,000. |
Before starting a prosecution, the Inspector-cum-Facilitator generally has to give the employer a written direction and an opportunity to comply with the Code. Offences punishable with fine only can also be compounded under Section 56. An unpaid-salary dispute therefore does not mean that every complaint automatically ends in a criminal prosecution.
Special Situations
If the company has shut down
If the company has simply stopped operating, keep pursuing the wage claim and preserve evidence of the employer entity, assets and directors. If formal insolvency or liquidation has started, move through the insolvency process as well as any separate remedy that remains available.
If you never received an appointment letter
An appointment letter is useful but it is not the only way to prove employment. Bank statements, salary slips, emails, attendance records, access cards, internal messages, HR correspondence and work records can help establish the employment relationship and the amount claimed.
If salary was paid in cash
Cash payment can make the evidence harder, but it does not remove the right to claim wages. Look for wage slips, attendance records, messages acknowledging payment, cash-payment vouchers, witness evidence and other records showing the work performed and the agreed amount.
If you work through a contractor
Contract-labour wage liability can involve both the contractor and the principal employer depending on the applicable provisions and the nature of the work. Section 43 of the Code on Wages makes the employer responsible for paying all amounts due under the Code, and the proprietor of the establishment becomes responsible where the employer fails to pay. The Occupational Safety, Health and Working Conditions Code also contains provisions dealing with payment of wages to contract labour, so name the correct entities in the demand rather than assuming only one company is liable.
If the employer is outside India
The correct forum depends on where the employment was performed, the employer entity, the contract and whether there is an Indian establishment or branch. A foreign employer does not automatically make the claim impossible, but cross-border service and jurisdiction need case-specific advice.
If salary is withheld because of a notice-period dispute
Separate the two issues. The employer may have a contractual claim for notice pay if the agreement contains one, but that does not by itself erase wages already earned. Ask for a written calculation showing exactly what has been deducted, the contractual clause relied on and the statutory basis for the deduction.
Documents You Should Keep
- Appointment or offer letter and later salary revisions
- Salary slips and bank statements showing missed credits
- Attendance, timesheet or work records
- Resignation, termination or relieving documents
- Emails, WhatsApp messages and HR communications about the unpaid amount
- PF or UAN records where social-security contributions are involved
- A month-by-month calculation of the amount claimed
- Company registered-office details and relevant employer information
- Proof that your written demand or legal notice was delivered
Frequently Asked Questions
How long can an employer legally delay salary in India?
For monthly wages covered by the Code on Wages, payment is generally due before the expiry of the seventh day of the following month. For an employee who resigns, is dismissed or removed, is retrenched, or becomes unemployed because of closure, wages payable under the Code are generally due within two working days.
Can a manager file a claim for unpaid salary?
Yes. The Code on Wages defines employee broadly and includes managerial, administrative, supervisory, technical and clerical work. The Industrial Relations Code uses a narrower worker definition, so the forum can differ.
Do I need a legal notice before filing a salary claim?
Not necessarily. A Section 45 wage claim does not make a legal notice a universal precondition. A written demand is still useful because it records the amount, the dates and the employer’s response.
How long do I have to claim unpaid salary?
A claim under Section 45 is generally filed within three years from when the claim arose, subject to the Code’s provision allowing the authority to admit a delayed application on sufficient cause.
Can the wage authority award ten times my unpaid salary?
The authority may award compensation of up to ten times the claim determined under Section 45(2). It is a statutory ceiling, not an automatic award.
Can my employer withhold my full salary because I did not serve the notice period?
A contract may create a notice-pay claim, but earned wages do not automatically become forfeited. The legality of any set-off or deduction depends on the contract, Section 18 and the facts.
Can I file a police complaint for unpaid salary?
Non-payment alone is ordinarily dealt with through labour or civil remedies. A criminal complaint needs a separate legal basis. PF contribution defaults can involve separate offences under social-security law.
What if my employer has closed the company?
If there is no formal insolvency process, preserve evidence and pursue the appropriate wage or civil claim. If insolvency or liquidation has begun, also submit the employee claim through the prescribed insolvency process.
What if I have no appointment letter?
You can still prove employment through bank credits, salary slips, email, attendance, HR records, internal messages and other evidence. Lack of an appointment letter does not by itself remove wage rights.
Can I recover salary that was deducted without permission?
An unauthorised deduction can be challenged under Section 18 where the claim falls within the Code. Keep the payslip, bank statement and the employer’s written explanation for the deduction.
Can an employer withhold my relieving letter or experience certificate until I give up the salary claim?
There is no general rule allowing an employer to use employment records as a substitute for paying earned wages. Keep the demand focused on the money due and challenge any document withholding separately where appropriate.
Which labour department should I approach?
For most private establishments, the relevant State labour department is the starting point for identifying the notified authority. The correct officer and filing form can vary by State and establishment.
References
The following statutory, government and official sources were used for the information in this article.
Central statutes
- Code on Wages, 2019
- Industrial Relations Code, 2020
- Code on Social Security, 2020
- Occupational Safety, Health and Working Conditions Code, 2020
- Insolvency and Bankruptcy Code, 2016
- Limitation Act, 1963
Government and official sources
- Ministry of Labour and Employment: Code on Wages
- Ministry of Labour and Employment: FAQs on Labour Codes, January 2026
- Ministry of Labour and Employment: Compliance Handbook for Employers under the Four Labour Codes, 2026
- EPFO grievance portal (EPFiGMS)
- Insolvency and Bankruptcy Board of India
- National Legal Services Authority
Official statute portal
Disclaimer
This article is for general information only and does not constitute legal advice or create an advocate-client relationship. The Code on Wages is now in force, but rules, forms and authorities can still differ by jurisdiction during the transition to the new Labour Codes.
Salary disputes can involve more than one legal issue, including deductions, notice pay, gratuity, bonus, PF, termination, contractual incentives or insolvency. A general article cannot determine the correct remedy for every case. Verify the current State procedure and consult a qualified advocate where the amount or facts are disputed.