Section 44 of the Code on Wages, 2019: Payment of Undisbursed Dues in Case of Death of Employee
Section 44 provides a statutory mechanism for amounts payable to an employee under the Code when payment cannot be made because the employee dies before payment or the employee's whereabouts are not known. It protects the amount by directing payment to a valid nominee or, where that is not possible, deposit with the prescribed authority.
What Section 44 means
In simple terms, an employer should not retain money that has become payable to an employee merely because the employee has died or cannot be located. Section 44 creates two routes: payment to the employee's nominee in accordance with the applicable rules, or deposit with the prescribed authority when there is no nomination or payment to the nominee cannot be made.
Text and effect of Section 44
Section 44(1): Subject to the other provisions of the Code, amounts payable to an employee that cannot be paid because of the employee's death before payment, or because the employee's whereabouts are not known, are to be dealt with through nomination or prescribed deposit.
Clause (a): the amount is paid to the person nominated by the employee in accordance with the rules made under the Code.
Clause (b): if no nomination has been made, or payment cannot for any reason be made to the nominee, the amount is deposited with the prescribed authority to be dealt with in the prescribed manner.
Section 44(2): once the employer pays the amount to the nominee, or deposits it with the prescribed authority in accordance with sub-section (1), the employer is discharged from liability to pay that amount.
Nomination under the Wages (Central) Rules, 2026
Rule 45 links the nomination procedure to Section 44. For establishments for which the Central Government is the appropriate Government, the employee makes the prescribed nomination in Form VII, physically or electronically. The rule contains requirements concerning family members, changes in family circumstances, minors and the allocation of shares among nominees.
Because the Central Rules govern the Central sphere, employers and employees in the State sphere should also check the rules notified by the appropriate State Government.
Deposit of undisbursed dues
Under Rule 46 of the 2026 Central Rules, where the amount remains undisbursed because no nomination was made or payment cannot be made to the nominee, the employer is required, after the prescribed six-month period, to deposit the amount with the jurisdictional Deputy Chief Labour Commissioner (Central) within the time specified by the rule. The prescribed modes include bank transfer or a crossed demand draft from a scheduled bank.
Rule 47 regulates how the deposited amount is to be held and dealt with by the authority. These rules should be read with Section 44 rather than treating Section 44 as a stand-alone payment procedure.
Section 44 at a glance
| Situation | Statutory course |
|---|---|
| Employee dies before an amount due under the Code can be paid | Pay the valid nominee in accordance with the applicable rules. |
| Employee's whereabouts are not known | Follow Section 44 and the applicable rules governing nomination and undisbursed dues. |
| No valid nomination, or payment to nominee cannot be made | Deposit the amount with the prescribed authority in the prescribed manner. |
| Employer validly pays the nominee or makes the statutory deposit | The employer is discharged from liability for that amount under Section 44(2). |
Related provision: Section 43
Section 43 of the Code on Wages, 2019 places responsibility on the employer to pay amounts required under the Code. Section 44 then provides the special mechanism for dealing with such amounts when ordinary payment cannot be completed because of death or unknown whereabouts.
Official legal resources
For authoritative text and current notifications, refer to the India Code portal and the Ministry of Labour and Employment. The final Central Rules were notified in the Gazette of India as G.S.R. 343(E) dated 8 May 2026.
Note: This page is a general legal information resource. Application of the Code and the Central or State rules depends on the appropriate Government and the facts of the establishment and employee.