Sikkim 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.
Chapters III to VII of the Sikkim Code on Wages Rules, 2022 (rules 13 to 51) cover the daily business of paying wages in Sikkim: when wages are due, how deductions, fines and advances are handled, what happens to unpaid dues, how a claim and an appeal are filed, which registers and wage slip are kept, how offences are compounded, and who pays contract workers. Chapter IV, in brief, constitutes the State Advisory Board.
Wages are paid before the expiry of the seventh day (fewer than one thousand persons employed) or the tenth day (more than one thousand). Deductions above fifty percent of wages are carried forward. Undisbursed dues are deposited with the Joint, Deputy or Assistant Labour Commissioner after six months (or three months where the employee has died or cannot be traced). Registers are Form I and Form IV; the wage slip is Form V, issued on or before payment. A composition is for fifty per cent of the maximum fine.
The rule set
This article covers the Sikkim Code on Wages Rules, 2022, as notified by Notification 20/DL dated 20 April 2022 in the Sikkim Government Gazette of 28 April 2022. Later amendments and State notifications under these rules should be checked in the State Gazette. Rule 1(3) says the rules come into force "on the date of their final publication in the Official Gazette". The notification, minimum wage criteria and working hours are in our first article on these rules; our hub article on State rules under the four Labour Codes explains where they fit.
The Central rules on the same subjects are explained in rules 13 to 16, rules 17 and 18 and rules 19 and 20, the claim rules in rules 45, 48 and 49 and 50, and the registers in rules 51 and 52. Sikkim's numbering is its own. If your payroll covers several States, a payroll compliance audit can match each State's rule numbers and forms.
Rules 13 to 21: payment, deductions, fines and advances
| Point | Rule | As printed |
|---|---|---|
| Time of payment | 13 | Before the expiry of the seventh day where fewer than one thousand persons are employed; before the tenth day where more than one thousand |
| Ceiling on deductions | 14 | Excess over fifty percent carried forward; recovery in a month not above fifty percent of that month's wages |
| Authority for section 19(1) | 15 | Joint Labour Commissioner, Deputy Labour Commissioner or Assistant Labour Commissioner having jurisdiction |
| Notice under section 19(2) | 16 | Displayed at conspicuous places; copy to the Inspector-cum-Facilitator |
| Approval of fines | 17 | Written intimation of particulars to the Authority, who hears employee and employer before granting or refusing |
| Deductions under the proviso to section 20(2) | 18 | Intimation to the Inspector-cum-Facilitator within 10 days of the deduction, with the reason |
| Damage or loss | 19 | Explain personally and in writing; opportunity to explain; deduction intimated to the employee within fifteen days |
| Advances | 20 | Instalments so that none in a wage period exceeds fifty per cent of wages; recorded in Form-I |
| Housing and other loans | 21 | Subject to the State Government's directions on extent and interest |
Under rule 18(2), the Inspector-cum-Facilitator examines the intimation and, if the explanation contravenes the Code or rules, starts action under the Code. These steps are the most frequently missed: the ten-day intimation to the Inspector-cum-Facilitator is an employer's duty after the deduction, not before. A payroll head at a hotel in Gangtok should log each deduction under the proviso with the date of intimation.
Chapter IV: the State Advisory Board in brief
The Board has twelve employer representatives and twelve employee representatives, with independent persons including two Members of the State Legislative Assembly, four wage and labour professionals, a member who is or has been a presiding officer of a Central Industrial Tribunal and two Labour Department members (rule 22). Independent members do not exceed one third of the Board and one third of the members are women. In addition to its statutory functions, the Board advises on minimum wages of working journalists and sales promotion employees when the State Government refers the matter (rule 23). Notice of a meeting is fifteen days, or seven days for an emergency (rule 25), the term of a member is normally two years (rule 32), and an outgoing member can be renominated for not more than two terms in total (rule 35). The chapter binds the Board and the State, not individual employers.
Rules 39 to 41: undisbursed dues
- Death or whereabouts unknown (rule 39). An amount due after the employee's death or because whereabouts are unknown, which could not be paid to a nominee within three months of becoming payable, is deposited by the employer with the Joint, Deputy or Assistant Labour Commissioner having jurisdiction, who disburses it to the nominee after ascertaining identity within 2 months of the deposit.
- No nomination or other reason (rule 40). An amount that stays undisbursed for six months from the date it became payable is deposited before the expiry of the fifteenth day after the last day of that six-month period, by bank transfer or crossed demand draft from any scheduled bank in India in favour of the officer.
- Handling (rule 41). The officer invests the amount in State Government securities or a fixed deposit in a scheduled bank, exhibits a notice on the notice board for at least fifteen days and publishes it in two newspapers circulating in the language commonly understood in the area, and releases the amount after a hearing. If the amount remains unclaimed for 7 years, it is dealt with as the State Government directs.
Rules 42 to 47: claims, registers, wage slip and compounding
A single application is filed under section 45(5) in Form-II (rule 42). An appeal under section 49(1) is in Form-III to the appellate authority having jurisdiction exclusively in Sikkim (rule 43). Fines and realisations under section 19(8) are recorded in a register in Form-I, electronically or otherwise, with the authority being the Joint, Deputy or Assistant Labour Commissioner; deductions and realisations under section 21(3) are recorded in Form-I; and every employer keeps registers under section 50(1) in Form I and Form IV (rule 44). The wage slip is in Form V under section 50(3), issued electronically or otherwise on or before payment of wages (rule 45).
For an offence, a complaint before the officer under section 53(1) by an authorised officer, an aggrieved employee or an Inspector-cum-Facilitator leads to summons, a statement of the offence, a plea, evidence on oath with cross-examination, defence evidence, and a decision under the Code (rule 46). An accused who wants composition applies in Form VI to the notified Gazetted Officer; if the offence is compoundable and the accused agrees, it is compromised for a sum of fifty per cent of the maximum fine provided for it, paid within the time specified in the composition order; where compounding follows the institution of prosecution, a copy goes to the officer under section 53(1) for action under section 56(6) (rule 47).
| Form | Rule | Purpose |
|---|---|---|
| Form I | 20, 44 | Register of Wages, Overtime, Fine, Deduction for damage and Loss |
| Form II | 42 | Single application under section 45(5) |
| Form III | 43 | Appeal under section 49(1) |
| Form IV | 44(3) | Employee Register |
| Form V | 45 | Wage slip |
| Form VI | 47 | Application under section 56(4) for composition of offence |
Rules 48 to 51: miscellaneous
Where employees are employed through a contractor, the proprietor of the establishment pays the contractor the amount payable before the date of payment of wages so that employees are paid in accordance with section 17, and the employer remains responsible for wages if the contractor or designated person fails to pay (rule 48). If the contractor fails to pay minimum bonus under section 26, the proprietor, on written information from employees or a registered trade union and after confirming the failure, pays the minimum bonus (rule 49). The Labour Commissioner (Sikkim), with the State Government's approval, frames an inspection scheme specifying a number for each Inspector-cum-Facilitator and establishment (rule 50). Rule 51 repeals the Equal Remuneration Rules, 1976, the Sikkim Minimum Wages Rules, 2005 and the Sikkim Payment of Wages Rules, 1992, without affecting their previous operation or any right, liability or obligation acquired under them.
A worked example
A hotel group in Gangtok employs fewer than one thousand people, so it pays wages before the end of the seventh day. When a front-desk employee leaves and does not collect final dues, the finance team holds the amount for six months and deposits it with the Joint, Deputy or Assistant Labour Commissioner within the next fifteen days by crossed demand draft, filing the bank proof. Each month it prints the register in Form I, the employee register in Form IV, and Form V wage slips.
Common lapses
- Paying wages after the seventh day (or the tenth, for an establishment above one thousand persons).
- Not intimating a deduction to the Inspector-cum-Facilitator within ten days.
- Missing the fifteen-day window after the six-month period for depositing undisbursed dues.
- Using the Central or another State's form numbers instead of Sikkim's Forms I to VI.
Need help with Sikkim payroll records?
If your payroll in Sikkim has not been checked against rules 13 to 21 and the Form I to Form V set, our payroll compliance audit can test the due dates, deduction notices and registers against the State text. A short review before the next wage cycle prevents a pattern of small errors.
Key takeaways
- Wages before the seventh day (under one thousand persons) or the tenth day (over one thousand).
- Deductions capped at fifty percent in a month; advances at fifty per cent per wage period.
- Deductions under the proviso to section 20(2): intimate the Inspector-cum-Facilitator within 10 days.
- Undisbursed dues: deposit after six months (three where death or untraced), within fifteen days.
- Registers Form I and Form IV; wage slip Form V; composition at fifty per cent of the maximum fine.
Read next
- Sikkim Code on Wages Rules, 2022: notification, minimum wages, working hours and weekly rest
- State rules under the four Labour Codes: which States have notified final rules
- Central rules 51 and 52: registers and wage slip
- Central rules 13 to 16: recovery of deductions and procedure for fines
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.