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Employment & Consumer Rights

My employer doesn't pay my salary - what can I do?

Updated · 6 July 2026

Send a legal demand notice, then file a claim under the Payment of Wages Act, 1936 (or Code on Wages, 2019) before the Labour Commissioner, or initiate insolvency under the IBC for corporate employers.

Is it illegal for my employer to delay or withhold my salary?

Yes. Withholding salary that is earned and due is a statutory wrong under the Payment of Wages Act, 1936 and the newer Code on Wages, 2019. Both impose:

(1) Time limits — wages must be paid before the 7th of the next month (small establishments) or 10th (large establishments);
(2) Permitted deductions only — fines, advances, statutory deductions like PF/ESI are allowed; arbitrary deductions are not;
(3) Penalty — employer can be fined ₹50,000 (first offence) or ₹1 lakh (repeat offence) per Code on Wages.

For salaried employees not covered by the Wages Act (e.g., higher earners), the obligation flows from the employment contract under the Indian Contract Act, 1872 — non-payment is breach of contract.

Which forum can I approach to recover unpaid wages?

The right forum depends on your salary band and the employer's status:

(1) For employees earning up to ₹24,000/month (or whatever the prevailing Wages Act ceiling is) — file under Section 15 of the Payment of Wages Act, 1936 before the Labour Commissioner. Summary procedure; decided in months.

(2) For 'workmen' under the Industrial Disputes Act, 1947 — raise a dispute under Section 2A directly with the Labour Court.

(3) For all employees — file a civil suit for recovery. A Summary Suit under Order 37 CPC works if the obligation is in writing.

(4) For corporate employers owing more than ₹1 crore in operational debt — file under Section 9 of the IBC, 2016 before the NCLT. Employees are 'operational creditors'.

What is the procedure under the Payment of Wages Act?

Step 1 — Send a written demand to the employer for the unpaid amount. Send by email and registered post; keep proof.

Step 2 — File an application under Section 15 with the Authority appointed under the Act (usually the Assistant Labour Commissioner) within 12 months of the wages becoming due.

Step 3 — Pay nominal court fee (₹100-₹500 depending on state).

Step 4 — Hearing. The Authority issues notice to the employer. Both sides present evidence. Most cases are decided in 4-9 months.

Step 5 — Order. The Authority can direct payment of the unpaid wages PLUS compensation of up to 10 times the deducted amount, plus interest at 12%.

Step 6 — Recovery. If the employer doesn't pay, the order is enforceable as a decree — bank account attachment and property auction follow.

Engage a reputable, specialised employment lawyer for substantial claims, though representation is not mandatory.

Can I use insolvency proceedings against a company that owes me salary?

Yes — and it's often the fastest leverage against a struggling corporate employer. Under the Insolvency and Bankruptcy Code, 2016:

(1) Employees are 'operational creditors' under Section 5(20);
(2) For dues totalling more than ₹1 crore (the threshold raised in 2020), you can file a Section 9 application before the NCLT;
(3) Procedure: Issue a demand notice in Form 3, wait 10 days, then file the Section 9 application in Form 5 with the unpaid invoice/payslip evidence;
(4) Effect: If the company can't dispute the debt or pay, the NCLT admits the case and a moratorium kicks in, freezing other proceedings. The company usually settles quickly to avoid Corporate Insolvency Resolution Process.

For amounts below ₹1 crore, the Labour Court / Civil Court is the appropriate forum. For very large dues, the IBC route is uniquely effective leverage.

Disclaimer: Content provided here is for general legal knowledge only and does not constitute formal legal advice. If you have an urgent or specific matter, please consult a registered advocate.