Rule 45 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.
Rule 45 lets every employee name a person to receive any amount due to him under the Code if he dies, using Form VII. It sets who may be nominated, what happens when the nominee is a minor, and when the employer must hand the money to the Deputy Chief Labour Commissioner (Central) instead. Employers who hold final dues of a deceased or untraceable employee should read it carefully. A payroll compliance audit will check whether your records carry valid nominations.
Every employee makes a declaration in Form VII, in physical form or electronically, naming a nominee to receive the amount standing to his credit if he dies, before the amount becomes payable or, if it has become payable, before payment is made (rule 45(1)(a)). An employee with a family must nominate the spouse or other family members; a nomination of a non-family member is invalid; a fresh nomination in favour of the spouse is needed on marriage and an earlier one is deemed invalid. If the amount could not be paid to the nominee within three months from the date it became payable, the employer deposits it with the Deputy Chief Labour Commissioner (Central), who disburses it to the nominee within two months of the deposit after ascertaining identity (rule 45(2)). The Rules apply where the Central Government is the appropriate Government; otherwise the State's own wage rules apply.
The section behind this rule
Section 44(1) of the Code: all amounts payable to an employee that cannot be paid because of his death before payment, or because his whereabouts are not known, shall (a) be paid to the person he has nominated "in accordance with the rules made under this Code"; or (b) where no nomination has been made, or the nominee cannot be paid, be deposited with the prescribed authority. Section 44(2): payment to the nominee, or deposit with the authority, discharges the employer's liability. See sections 43 and 44. Rule 45 covers the nomination route and the first deposit; rules 46 and 47 cover the no-nomination route. See rules 46 and 47.
Rule 45(1): the nomination
(a) Declaration in Form VII
"Every employee shall make a declaration in Form-VII in physical form or electronically, nominating a person conferring the right to receive the amount that may stand in the credit of the employee on the event of death". The timing: before that amount has become payable, or, where it has become payable, before payment has been made.
(b) Who may be nominated
If the employee has a family at the time of nomination, the nomination shall be in favour of the spouse, or the spouse in preference, followed by one or more members of the family (the printed words are awkward; the sense is the spouse first, then other family members). Two provisos:
- A nomination by an employee with a family in favour of a person other than a member of the family is invalid.
- On marriage, the employee must make a fresh nomination towards the spouse; any nomination made before the marriage is deemed invalid.
The Rules do not define "family". Form VII has a certificate that the employee has no family and that if he acquires one, the nomination is deemed cancelled, and another that the father or mother is dependent on him. The text we read gives no list of family members beyond that.
(c) Minor nominees
Where the nomination is wholly or partly in favour of a minor, the employee may appoint a major person of the family as guardian of the minor nominee; if there is no major person in the family, the employee may, "by discretion", appoint any other person. Form VII column (6) asks for the guardian's name, relationship and address.
(d) More than one nominee
If more than one is nominated, the nomination "shall specify the amount or share payable to each of the nominees at employee's own discretion so as to cover the whole of the amount that may stand to the credit of the employee". So the shares must add up to the whole amount.
Form VII at a glance
| Part | What it asks |
|---|---|
| Employee details | name in block letters, father's or spouse's name, date of birth, sex, marital status, permanent and temporary address |
| Declaration | nominates the person(s), or cancels the previous nomination and nominates the persons below, to receive any amount due from the employer on death |
| Nominee table (columns 1 to 6) | name of nominee(s), address, relationship with the employee, date of birth, total amount or share of accumulations in credit to be paid to each nominee, and, for a minor, name, relationship and address of the guardian |
| Certificates | no family (nomination cancelled if a family is acquired); father or mother dependent; strike out what does not apply |
| Employer's certificate | that the declaration was signed or thumb-impressed before the employer or an authorised officer, after reading or being read over |
| Acknowledgement | employee's receipt of the duplicate copy |
Drafting slip: the acknowledgement at the foot of Form VII refers to "the duplicate copy of nomination in Form-VIII". The nomination is Form VII; Form VIII is the form of notice by the authority or appellate authority. The text is printed as is; treat it as a reference to Form VII. See Forms V to VII.
Rule 45(2): when the nominee cannot be paid
Where an amount payable under the Code is due after the death, or on account of the employee's whereabouts not being known, and it could not be paid to the nominee until the expiry of three months from the date it became payable, then:
- the employer deposits the amount with the Deputy Chief Labour Commissioner (Central) having jurisdiction; and
- that officer disburses it to the person nominated after ascertaining the identity of the employee, within two months of the date of the deposit.
| Step | Time |
|---|---|
| Amount becomes payable | day 0 |
| Employer tries to pay the nominee | up to three months |
| Deposit with the Deputy Chief Labour Commissioner (Central) | after three months where not paid |
| Disbursement to the nominee | within two months of deposit |
Note that the rule speaks of "ascertaining the identity of the employee" where the evident need is to establish the nominee's identity as well as the facts of death; the text speaks only of the employee. It does not set a date for the deposit, only that it follows the three-month period.
Illustration (hypothetical). An employee dies on 10 January with final dues payable on 20 January. The nominee does not claim by 20 April. The employer deposits the amount with the Deputy Chief Labour Commissioner (Central). If it is deposited on 5 May, the officer should disburse it to the nominee by 5 July. Under section 44(2), the deposit discharges the employer.
Practical steps
- Get Form VII at joining, and again after marriage or any change of nominee. Form I of the employee register has a "Nominee" field, to be filled from the nomination form (see Forms I, IV and IX).
- Keep the employer's certificate on Form VII signed.
- Track dues of any employee who dies or cannot be traced, and diarise the three-month point.
Need help managing nominations and unpaid final dues?
An unpaid final settlement of a deceased employee can sit on the books for years. Our payroll compliance audit team can collect Form VII nominations across your workforce, track unpaid dues and prepare the deposit and records.
Key takeaways
- Every employee makes a Form VII nomination, physically or electronically.
- With a family, the nominee must be the spouse or a family member; others are invalid.
- Marriage requires a fresh nomination in favour of the spouse.
- Shares must add up to the whole amount; a guardian is named for a minor nominee.
- If the nominee cannot be paid within three months, the employer deposits with the Deputy Chief Labour Commissioner (Central), who disburses within two months.
- Payment or deposit discharges the employer (section 44(2)).
Read next
- Rules 46 and 47: deposit of undisbursed dues and how it is dealt with
- Sections 43 and 44: responsibility for dues and undisbursed dues on death
- Forms V, VI and VII: wage slip, composition and nomination
- Payment of wages under new labour codes
Disclaimer: Based on the Code on Wages, 2019 (as enacted) and, where noted, the Code on Wages (Central) Rules, 2026 (G.S.R. 343(E), 8 May 2026), as on 1 October 2026. The Code is in force from 21 November 2025; State Governments make their own rules for establishments where the State is the appropriate Government, and wage rates are notified separately. Verify the current position before acting.