Employer not paying your salary or final settlement? How to recover it

What the law says

When your pay is due, and the free route to recover it. Under Section 5 of the Payment of Wages Act, 1936, wages for a normal wage period must be paid within seven or ten days of its end, and where your employment ends, the wages you have earned must be paid before the expiry of the second working day. If they are not, the quickest and cheapest route is a claim to the Payment of Wages Authority, which is usually the labour commissioner, under Section 15. That authority hears claims for delayed or deducted wages and can direct the employer to pay the amount due together with compensation. You must apply within twelve months of the date the payment fell due, though the authority can condone a delay for sufficient cause, such as your having been pursuing conciliation. Importantly, "wages" here is read to include your full and final dues, including separation and voluntary-retirement benefits, so those can be recovered this way too.

The gates on the free routes. There are two summary routes, and each has a gate. The Payment of Wages Authority under Section 15 is for wage claims within the Act's wage ceiling; if your salary is above that ceiling, this route is not open to you. Separately, if you are a "workman" under the Industrial Disputes Act, 1947, you can apply to the Labour Court under Section 33C(2) to compute and recover your dues, and that route has no fixed limitation period; but if you are not a workman, it is not available. Whether you are a workman turns on the actual nature of your duties, not your job title, which we cover in our guide to wrongful termination. So the free routes fit clear wage claims by employees within the ceiling, or by workmen.

The limits of the free route: what it cannot do. These are summary, execution-like forums. They are built to recover clear, existing, contractual wages, and they can decide issues incidental to that, such as whether you abandoned your job. What they cannot do is adjudicate a fundamentally disputed case. If your employer genuinely denies that you were an employee at all, or denies that the amount is owed, the summary authority has no jurisdiction to try that dispute, and courts will set aside an order that overstepped. Nor can these forums create a new right, revise your pay scale, or grant an unadjudicated interest claim; they recover what is already contractually due. When the dispute is real and fundamental, you are pushed to a full civil suit or an industrial-dispute reference.

The civil suit, and interest. Where your salary is above the wage ceiling, or the claim is genuinely contested, the route is a civil suit under the general law, and the limitation period there is three years. A winding-up petition under company law is another route that courts have allowed for recovering outstanding wages. On interest: courts read a term for interest on delayed wages into the employment contract by necessary implication, and for a statutory terminal benefit like gratuity, interest on delay is a mandatory statutory obligation, not a matter of the employer's discretion. One limit to keep in mind is that company directors are generally not personally liable for the company's wage arrears unless one of them was specifically the named manager of the establishment.

What you can do

1. Know the timeline. On termination or resignation, your earned wages and full and final dues are payable quickly, before the second working day under the Payment of Wages Act. That is the benchmark you are enforcing.
2. Send a written demand first. A clear email or letter setting out what is owed creates a record and sometimes resolves it without a claim.
3. For a clear claim within the wage ceiling, use the free route: apply to the Payment of Wages Authority, usually the labour commissioner, under Section 15, within twelve months. It can order the wages plus compensation.
4. If you are a workman, the Labour Court under Section 33C(2) is an alternative, and it has no fixed limitation period. Whether you are a workman depends on your actual duties.
5. Know when the free route will not work: if your salary is above the wage ceiling, or your employer genuinely disputes that you were an employee or that anything is owed, you will need a civil suit, where the limitation is three years, or a full reference.
6. Claim interest on the delay, and remember that interest on delayed gratuity is mandatory, not discretionary.
7. Keep everything: your appointment letter, salary slips, the full and final statement, your resignation or relieving letter, and every reminder you sent. These decide both the amount and which forum fits.

Cases that matter

Payment of Wages Inspector v. Surajmal Mehta, Supreme Court of India (1968). The Court held that the Payment of Wages Authority's jurisdiction under Section 15 is limited to unauthorised deductions and delayed payments; while it can decide incidental questions, it cannot adjudicate a claim where the employer wholly denies the liability and the entitlement, which must instead go to the Labour Court. It is the anchor for what the summary route can and cannot decide.

Bombay Dyeing & Manufacturing Co., Ltd. v. The State of Bombay, Supreme Court of India (1957). The Court held that the bar on civil suits applies only to claims that could be recovered under Section 15, so for salaries above the Act's wage ceiling the general civil law applies, with a three-year limitation. It draws the line between the free wage-authority route and a civil suit.

M/S Bombay Chemical Industries v. Deputy Labour Commissioner, Supreme Court of India (2022). A person claiming to have been a salesman sought unpaid wages under Section 33C(2), and the employer denied the employment relationship entirely. The Court held that the Labour Court's Section 33C(2) power is limited to executing existing rights and cannot adjudicate a disputed employer-employee relationship. It shows the outer limit of the free computation route.

H. Gangahanumegowda v. Karnataka Agro Industries Corpn. Ltd., Supreme Court of India (2003). An employer paid gratuity late and resisted paying interest. The Court held that interest on delayed gratuity is a statutory compulsion, not a matter of discretion, unless the employer has formal permission excusing it for the employee's own fault. It confirms your right to interest on delayed terminal dues.