Introduction For employees and workmen, delayed payment of salary, provident fund and other statutory dues can cause serious financial hardship, particularly when the delay continues for several years. The Supreme Court has now brought an end to a long-running dispute concerning employees and workmen of five defunct State-owned corporations of the erstwhile State of Bihar. The Court has directed the States of Bihar and Jharkhand to pay a one-time amount of ₹1 lakh to each eligible daily-wage employee/workman who was engaged during the relevant period, in addition to amounts already determined and disbursed. The Court has also directed payment of 12% simple interest per annum on delayed EPF dues and 6% simple interest per annum on delayed salary, wages and other monetary dues, calculated from the date the respective amounts became due until actual payment. The judgment also protects the claims of employees or legal heirs who could not be traced or whose claims remain pending for want of documents by giving them 12 months to approach the concerned Nodal Officer. Background of the Case The dispute arose following the reorganisation of the erstwhile State of Bihar and the creation of Jharkhand under the Bihar Reorganisation Act, 2000. The reorganisation resulted in questions concerning the allocation and payment of liabilities relating to employees and workmen of five State-owned inter-State corporations. The corporations involved were: Bihar State Construction Corporation Ltd. Bihar State Industrial Development Corporation Ltd. Bihar State Electronic Development Corporation Ltd. Bihar State Forest Development Corporation Ltd. Bihar State Panchayati Raj Financial Corporation Ltd. A large number of employees and workmen had remained deprived of their salary, provident fund, retiral benefits and other monetary entitlements for prolonged periods. The dispute eventually reached the Supreme Court and included earlier proceedings concerning the financial and service-related liabilities of the defunct corporations. Why Did the Matter Remain Pending for So Long? Following the creation of Jharkhand, questions arose regarding which State would be responsible for particular liabilities and how the dues of employees and workmen would be calculated and disbursed. The dispute continued for years. The Supreme Court had earlier constituted a Committee headed by former Supreme Court Judge Justice Dinesh Maheshwari to examine the claims and assist in resolving the outstanding issues. By its order dated 29 May 2026, the Supreme Court considered the Committee's final report and dealt with several aspects of the employees' claims. However, certain issues remained to be decided, including: Identification and verification of remaining employees and legal heirs; Entitlements of daily-wage workers; Claims of legal heirs of deceased workers; and Interest payable on delayed salary, retiral and provident fund dues. The latest judgment addresses these remaining issues. How Many Employees Had Received Their Dues? The States informed the Supreme Court that out of 2,274 verified employees/workmen, dues had been fully disbursed to approximately 2,074 persons. Around 200 cases remained pending, primarily because: The employees could not be traced; Legal heirs could not be identified or contacted; or Required documents and verification formalities were incomplete. The Supreme Court therefore addressed the question of how these remaining claims should be dealt with. What Did the Supreme Court Decide About Untraced Employees? The Court closed the general identification and verification exercise but made it clear that such administrative closure would not extinguish the underlying entitlement of eligible employees or their legal heirs. An employee/workman or legal heir who could not previously be traced will have 12 months from the date of the judgment to approach the concerned Nodal Officer. The claimant will have to submit the documents required for verification. Once the claim is verified, the amount found payable will have to be processed and disbursed in accordance with law. Therefore, an employee's claim is not automatically lost merely because the person could not be traced during the earlier verification exercise. Supreme Court Rejects Flat ₹42.50 Daily-Wage Calculation One of the important issues concerned the calculation of dues payable to daily-wage workers. The States had relied upon a flat rate of ₹42.50 per day for calculating workmen's dues over a prolonged period beginning from 1992. The Supreme Court found this approach inadequate. The Court observed that the fact that a worker was engaged on a daily-wage basis cannot, by itself, justify treating the value of the worker's labour as fixed and unchanged for several decades. The Court noted that wages and the cost of living change over time. Therefore, applying the same ₹42.50 daily rate across a prolonged period did not provide a fair and reasonable measure of the monetary entitlement of the workers. Why Did the Court Not Order a Fresh Calculation? The Court could have directed the authorities to undertake a fresh individual calculation of the wages of every affected daily-wage worker. However, the dispute had already remained pending for several decades. A fresh determination of the wages of each individual worker could have resulted in another prolonged round of proceedings and further delay. To balance the equities and bring finality to the matter, the Court instead directed the States to provide an additional one-time payment of ₹1 lakh to each concerned daily-wage employee/workman who was engaged during the relevant period. This amount is in addition to the amounts already determined and disbursed. Who Will Receive the Additional ₹1 Lakh? The one-time payment is intended for the concerned daily-wage employees/workmen who were engaged during the relevant period. Importantly, the Court clarified that the ₹1 lakh payment is additional to the dues already paid or determined. Therefore, it is not a replacement for the employee's existing monetary entitlement. The direction was issued to bring finality to the long-pending dispute rather than requiring another decades-long exercise of recalculating individual daily wages. What Did the Supreme Court Say About Delayed EPF Dues? The Court separately examined delayed Employees' Provident Fund (EPF) dues. Provident fund is a statutory social-security benefit and delayed payment can cause financial prejudice to employees. The Court referred to Section 7-Q of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, which provides for interest on delayed EPF contributions. The Supreme Court directed Bihar and Jharkhand to pay: 12% simple interest per annum on delayed EPF dues, calculated from the date the respective amount became due until the date of actual payment. What About Delayed Salary and Wages? The Court also considered salary, wages and other monetary entitlements that remained unpaid for long periods. Unlike EPF dues, there is no single statutory provision prescribing one uniform rate of interest for every delayed salary claim. The Court therefore considered the circumstances of the case and the prolonged deprivation suffered by the employees. It directed payment of: 6% simple interest per annum on delayed: Salary; Wages; Other monetary entitlements; and Applicable non-EPF dues. The interest is to run from the date the respective amount became due and payable until actual payment. Why Is Interest Important in Delayed Salary Cases? Salary is not merely an ordinary monetary claim. For an employee, salary represents the means through which daily living expenses, family needs, medical expenses and other essential requirements are met. When lawful salary or retirement benefits remain unpaid for years, the employee is deprived of the use of money that was legally due. Interest therefore serves a compensatory purpose for the period during which the employee was deprived of the amount. In the present case, the Supreme Court considered the extraordinary duration of the delay while determining the appropriate relief. What About Legal Heirs of Deceased Employees? The proceedings also covered claims involving employees or workmen who had died before their dues could be disbursed. Where an eligible employee has died, the legal heirs may pursue the claim in accordance with the applicable legal and verification requirements. The Supreme Court specifically preserved the claims of untraced employees/workmen and their legal heirs. Such claimants have been given 12 months from the date of the judgment to approach the appropriate Nodal Officer with the required documents. Transparency: States Directed to Publish Employee Details The Supreme Court has also issued important directions regarding transparency. Bihar and Jharkhand have been directed to publish updated particulars of the concerned employees and workmen in the public domain. The information is required to include details such as: For employees whose dues have been paid: Name; Designation; Period of service; Amount payable; Amount disbursed; Date of disbursement; and Other relevant identification details. For pending claims: Present status of the claim; Reason for pendency; Documents required; Steps required for processing; and Contact details of the concerned Nodal Officer. The information is to be published on the relevant official government websites. When Must the States Publish the Information? The Supreme Court directed the States to complete the publication exercise within four weeks from the date of the judgment. The information is also required to be updated periodically to reflect subsequent verification, payment or discharge of liability. This direction is intended to make the process more transparent and enable employees and legal heirs to determine the status of their claims. What Should an Untraced Employee or Legal Heir Do? An employee or legal heir who believes that a claim remains unpaid should collect all available documents. These may include: Appointment or employment records; Employee identity documents; Salary records; Service records; Provident fund documents; Retirement documents; Death certificate, where applicable; Legal-heir documents; Previous correspondence; Bank details; and Any documents relating to the corporation's employment or payment records. The claimant should approach the concerned Nodal Officer within the 12-month period prescribed by the Supreme Court. What Is the Significance of the Judgment for Daily-Wage Workers? The judgment is significant because the Court recognized that being a daily-wage worker does not mean that the value of the worker's labour can simply be treated as static over several decades. The Court distinguished the legal nature of daily-wage employment from regular employment but emphasized that the status of a worker as a daily wager cannot by itself justify an unfair calculation of monetary dues. The additional ₹1 lakh payment provides a specific form of relief in the extraordinary circumstances of this long-pending dispute. However, the Court also clarified that the relief is based on the peculiar facts and circumstances of this case and should not automatically be treated as a general rule applicable to every daily-wage dispute. Important Legal Principles The judgment highlights several important principles concerning employee dues. 1. Lawful salary dues cannot remain unresolved indefinitely Employees are entitled to receive amounts lawfully payable to them. 2. Daily-wage status does not justify arbitrary calculation The fact that a worker is a daily wager does not mean that a fixed historical rate can automatically be applied across several decades. 3. EPF carries statutory interest for delayed payment Delayed EPF dues attract the applicable statutory interest under Section 7-Q. 4. Employees can receive interest on delayed monetary dues In appropriate circumstances, interest may be awarded to compensate employees for prolonged deprivation of salary and other lawful monetary entitlements. 5. Legal heirs can pursue unpaid employee dues The death or inability to trace an employee does not necessarily extinguish an existing entitlement. 6. Transparency is important in large-scale employee claims Publication of payment and pending-claim details can help employees and legal heirs verify the status of their claims. What Does This Mean for Employees Whose Salary or EPF Is Delayed? This judgment is particularly relevant for employees dealing with prolonged non-payment of: Salary arrears; Wages; Provident fund; Retiral dues; Other employment-related monetary benefits. However, the exact interest rate or remedy in another case will depend on the applicable statute, employment relationship, contractual terms, facts and orders of the competent authority or court. The Supreme Court's 6% and 12% directions in this case arise from the specific circumstances before it. Frequently Asked Questions Who will receive the additional ₹1 lakh? The Supreme Court has directed payment of ₹1 lakh to each concerned daily-wage employee/workman who was engaged during the relevant period, in addition to amounts already determined and disbursed. Is the ₹1 lakh payment instead of the employee's existing dues? No. The ₹1 lakh payment is an additional one-time amount and does not replace amounts already determined and payable. What interest has been ordered on delayed EPF dues? The Court has directed 12% simple interest per annum on delayed EPF dues, from the date the amount became due until actual payment. What interest has been ordered on delayed salary and wages? The Court has directed 6% simple interest per annum on delayed salary, wages and other applicable monetary entitlements. What if an employee cannot be traced? The underlying claim is not automatically extinguished. The employee or legal heir may approach the concerned Nodal Officer within 12 months from the date of the judgment, along with the required documents. What if the employee has died? The employee's legal heirs can approach the concerned Nodal Officer and submit the documents required for verification of the claim. Why did the Supreme Court reject the ₹42.50 daily-wage calculation? The Court found that applying a uniform ₹42.50 rate over a prolonged period from 1992 onwards failed to account for changes in wages and the cost of living and therefore was not a fair and reasonable measure of the workers' monetary entitlement. Does this judgment mean every daily-wage worker in India is entitled to ₹1 lakh? No. The Court's directions arise from the specific facts and extraordinary circumstances of this case. They should not automatically be treated as a general entitlement for all daily-wage workers. Key Takeaways Bihar and Jharkhand must pay ₹1 lakh as a one-time additional amount to eligible daily-wage workers covered by the judgment. The payment is in addition to existing dues. Delayed EPF dues will carry 12% simple interest per annum. Delayed salary, wages and other monetary dues will carry 6% simple interest per annum. Interest is calculated from the date the respective amount became due until actual payment. Untraced employees and legal heirs have 12 months to approach the concerned Nodal Officer. The States must publish details of paid and pending claims on their official websites. The Supreme Court rejected the use of a flat ₹42.50 daily rate as a fair basis for calculating dues over several decades. The relief granted is based on the exceptional facts of this particular dispute. Conclusion The Supreme Court's judgment brings significant relief to employees and daily-wage workers whose salary, provident fund and other monetary entitlements remained unresolved for decades following the reorganisation of Bihar and the creation of Jharkhand. By directing an additional ₹1 lakh payment to eligible daily-wage workers, together with 12% interest on delayed EPF dues and 6% interest on delayed salary and other monetary dues, the Court has sought to provide finality to a dispute that had remained pending for an exceptionally long period. At the same time, the Court has ensured that employees and legal heirs who could not previously be traced are not deprived of their underlying claims. Such persons have been given a 12-month window to approach the concerned Nodal Officer with the necessary documents. The judgment also highlights the importance of timely payment of employee dues and recognizes that prolonged deprivation of salary and statutory benefits can cause serious financial prejudice to workers and their families. Case Details Case Name: Bihar State Ardh Sarkari Arajpati Karamchari Maha Sangh & Others v. State of Bihar & Others Court: Supreme Court of India Date of Judgment: 28 September 2026 Bench: Justice Vikram Nath and Justice Sandeep Mehta Case Number: W.P.(C) No. 932 of 2022 Neutral Citation: 2026 INSC 1061 Citation: 2026 LiveLaw (SC) 995 Important Legislation: Bihar Reorganisation Act, 2000 Employees' Provident Funds and Miscellaneous Provisions Act, 1952 Section 7-Q, Employees' Provident Funds and Miscellaneous Provisions Act, 1952 Article 21, Constitution of India SEO Keywords daily wage workers legal rights, delayed salary payment, unpaid salary legal remedy, EPF delayed payment interest, employee dues, salary arrears legal remedy, daily wage worker compensation, Supreme Court employee rights, provident fund interest, delayed wages, employee legal rights India, legal remedy for unpaid salary, government employee dues, labour law India, daily wage workers rights. Meta Title Supreme Court Orders ₹1 Lakh for Daily-Wage Workers and Interest on Delayed Dues Meta Description Supreme Court directs Bihar and Jharkhand to pay ₹1 lakh to eligible daily-wage workers and 12% interest on delayed EPF dues and 6% on salary and other dues. Suggested URL Slug supreme-court-daily-wage-workers-delayed-salary-epf-dues Disclaimer: This article is intended for general legal awareness and informational purposes only. It does not constitute legal advice or create an advocate-client relationship. The directions discussed in this article arise from the specific facts and circumstances of the case and may not automatically apply to other employment or daily-wage disputes.