Wage Claim explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
When wages or other dues cannot be paid, when an employee or union files a claim, or when an order is challenged, the Code on Wages (Bihar) Rules, 2026 supply the procedure. Rules 38 to 40 deal with nomination and undisbursed dues, rules 41 and 42 with claims and appeals, rule 45 with compounding of offences, and rules 20 to 37 with the State Advisory Board.
The rules are the Code on Wages (Bihar) Rules, 2026, as notified on 30 June 2026 and published in the Bihar Gazette (Extraordinary) No. Patna 696 of 1 July 2026. Dues that cannot be paid to a nominee are deposited with the Deputy Labour Commissioner (rules 38 and 39). An employer's appeal is admitted only with proof of prior minimum payment of twenty-five per cent of the total claim amount (rule 42). Compounding is for fifty per cent of the maximum fine (rule 45).
Later amendments and State notifications under these rules should be checked in the State Gazette. Rule 1(3) says the rules come into force "from the date of publication in official Gazette". Employers facing a claim can take a first view from our legal dispute resolution team.
Nomination and dues on death (rule 38)
Under rule 38(1), each employee submits a declaration in Form VII nominating a person to receive the amount standing to the employee's credit on death, if the amount has not become payable or has become payable but not yet been disbursed. Where the employee has a family, the nomination must be in favour of the spouse, or the spouse in preference followed by one or more family members. A nomination of a person outside the family by an employee who has a family is invalid. A fresh nomination towards the spouse must be made on marriage, and any earlier nomination is deemed invalid. For a minor nominee, the employee may appoint a major family member as guardian, or any other person if there is none. Where there is more than one nominee, the shares must be specified so as to cover the whole amount.
Under rule 38(2), where an amount due after death, or because the whereabouts of the employee are not known, could not be paid to the nominee until three months after it became payable, the employer deposits it with the Deputy Labour Commissioner having jurisdiction, who disburses it to the nominee after ascertaining identity within three months of the deposit. The Central position is in our post on rule 45 of the Central Rules, nomination and undisbursed dues on death.
Other undisbursed dues (rules 39 and 40)
| Step | Rule | What the rule prints |
|---|---|---|
| Deposit | 39(1) | Where no nomination exists or for any other reason the amount could not be paid until six months from the date it became payable, the employer deposits it with the Deputy Labour Commissioner before the expiry of the fifteenth day after the last day of that six-month period |
| Mode | 39(2) | Bank transfer or a crossed demand draft from a scheduled bank in India drawn in favour of the authority |
| Holding | 40(1) | Invested in Central or State Government Securities or deposited as a fixed deposit in a scheduled bank |
| Notice | 40(2) | Notice on the notice board for at least fifteen days and in two newspapers circulating in the language commonly understood in the area where the wages were earned |
| Release | 40(3) | To the nominee or claimant in whose favour the Deputy Labour Commissioner decides after a hearing |
| Unclaimed | 40(4) | After seven years, transferred to the Bihar State Labour Welfare Fund or any other existing fund under the applicable State law |
Claims before the authority (rule 41)
An application under section 45(4), or a single application under section 45(5), is filed manually or electronically in Form II with the documents specified in the Form, to the authority having jurisdiction. The authority serves a notice on the employer in Form VIII, electronically or by registered post, to appear on a specified date with documents and witnesses, and informs the applicant of the date. If the employer or representative does not appear, the authority may hear and decide ex parte; if the applicant does not appear without reasonable cause shown in advance, the application may be dismissed. The Central rule is explained in our post on rules 48 and 49 of the Central Rules, returns and procedure for filing claims.
Appeals (rule 42)
A person aggrieved by an order under section 45(2) may appeal under section 49(1) in Form III, electronically or by registered post, with the documents mentioned in the Form, to the appellate authority having jurisdiction. The employer's appeal carries a condition: it is not admitted unless accompanied by satisfactory proof of the prior minimum payment of twenty-five per cent of the total claim amount. The appellate authority serves a notice in Form VIII and decides by order after hearing both sides. Under rule 42(4) the Appellate Authority is the Labour Commissioner, Bihar, or an officer notified by the Labour Resource and Migrant Workers Welfare Department not below the designation of Joint Labour Commissioner. Rule 42 prints no period for filing the appeal; the Code's own provisions govern the time. See also rule 50 of the Central Rules on the procedure for filing appeal.
Compounding of offences (rule 45)
An accused person may apply in Form VI, electronically or otherwise, to the Gazetted Officer notified under section 56(1). The officer checks whether the offence is compoundable and, if the accused agrees, compromises the offence for a sum of fifty per cent of the maximum fine provided for the offence under the Code, payable within the time stated in the order. If the offence is compromised after prosecution has begun, a copy of the order is sent to the officer referred to in section 53(1). A composition certificate is made in Form VIA. If the accused does not pay, proceedings continue; if composition is before prosecution, no prosecution may follow for that offence. The Central rule is in our post on rule 54, manner of composition of offences.
The State Advisory Board in brief (rules 20 to 37)
Rule 20 provides that the Board has twelve persons representing employers and twelve representing employees, plus independent persons nominated by the State Government. The Additional Chief Secretary, Principal Secretary or Secretary of the Labour Resource and Migrant Workers Welfare Department is Chairperson and the Labour Commissioner, Bihar is Member Secretary. Independent members shall not exceed one-third of the total and one third of the members shall be women (rule 20(4)). Rule 21 adds advice on minimum wages for sales promotion employees and working journalists. The Chairperson calls a meeting on written requisition from not less than one half of the members within fifteen days (rule 22); notice goes at least seven days before, or three days in an emergency (rule 23). Quorum is at least one-third of members with at least one representative each of employers and employees (rule 25). Employers need not act on any of this directly, but the Board's advice shapes minimum-wage notifications.
A worked example
Kosi Steel Fabricators of Purnia has a welder's final dues of wages outstanding after his sudden death. There is a Form VII nomination in favour of his wife. The unit pays her. If the nomination cannot be honoured for three months, rule 38(2) requires deposit with the Deputy Labour Commissioner. If a claim is filed in Form II and the authority orders payment, an appeal by the unit goes in Form III, backed by proof that twenty-five per cent of the claim amount has already been paid.
Need help with a wage claim or appeal in Bihar?
Missing the twenty-five per cent deposit or the deposit date for undisbursed dues can cost a party its position. Our legal dispute resolution team can read the order, the forms and the rule periods with you and plan the next step.
Key takeaways
- Nominations are in Form VII; a family nomination must be in favour of family members (rule 38).
- Undisbursed dues go to the Deputy Labour Commissioner by the fifteenth day after the six-month period (rule 39).
- Unclaimed amounts move to the Bihar State Labour Welfare Fund or another existing fund after seven years (rule 40).
- An employer's appeal needs proof of prior payment of twenty-five per cent of the claim (rule 42).
- Compounding is for fifty per cent of the maximum fine, applied for in Form VI (rule 45).
Read next
- Code on Wages (Bihar) Rules, 2026: payment of wages, deductions, fines and advances
- Code on Wages (Bihar) Rules, 2026: registers, wage slip, forms and miscellaneous rules
- Rule 50 of the Central Rules: procedure for filing appeal
Disclaimer: Based on the State or Union territory rules named above, as notified under the Labour Codes and consulted on 4 October 2026. Later amendments, State notifications, fees and forms should be checked in the State Gazette and on the State labour department website. This article is general information, not legal advice; check the official text before acting.