Section 45: Payment of dues in case of death of employee

Overview

This section of the Code on Wages, 2019, deals with the crucial issue of ensuring that an employee’s earned wages and other dues are paid to their family or designated beneficiary in the unfortunate event of their death. It provides clarity on who receives these payments, safeguarding the financial interests of the employee’s dependents.

Scope and Coverage

• Which employees and establishments are covered: This section applies to all employees covered under the Code on Wages, 2019. This includes workers employed in any factory, mine, plantation, establishment, or other workplaces as defined by the Code. It covers both skilled and unskilled workers, and those employed directly or through contractors.
• Any thresholds or exclusions: There are no specific thresholds or exclusions regarding the amount of wages or the type of employment. The provision applies regardless of the employee’s wage level or the nature of their work.

Key Obligations and Rights

• Main duties of employers: Employers are legally obligated to ensure that all outstanding wages, salary, bonuses, and other dues owed to a deceased employee are paid promptly. They must identify the employee’s nominee (if any) or their legal heirs and make the payment accordingly. The employer must also maintain records to facilitate this process.
• Important rights or protections for employees: Employees have the right to designate a nominee to receive their dues in case of death. If no nominee is designated, the legal heirs of the deceased employee have the right to claim these dues. This ensures financial security for the employee’s family during a difficult time.

Compliance and Penalties

Failure to comply with Section 45 can lead to penalties under the Code on Wages, 2019. Labour Inspectors have the authority to conduct inspections and investigate complaints regarding non-payment of dues. Violations can result in fines and, in some cases, imprisonment for the employer or responsible person. Repeated or serious violations can lead to more severe penalties.

Practical Examples

• Example 1 from a typical workplace: Ramesh, a factory worker, dies unexpectedly. He had previously submitted a nomination form designating his wife, Sita, as his beneficiary. The employer is legally bound to pay all of Ramesh’s outstanding wages, bonuses, and any other dues directly to Sita.
• Example 2 for a borderline scenario: Priya, an office employee, dies without leaving a nomination. Her husband and two children approach the employer to claim her dues. The employer must follow the legal process to determine Priya’s legal heirs (usually through a succession certificate) and then pay the dues to them.