If you are thinking of changing your job or may have to leave your office job for any reason, then there is a great news for you. The government has completely changed the game for the employees who were waiting for Full and Final (FnF) for months. With the implementation of the new Labor Code, now companies will have to make your full and final payment within just two working days.
What is the new rule?
Under the new wage code, now all types of employees will have to be paid their full and final settlement amount officially within two working days. According to Arjun Paleri, Partner, BTG Advay, Section 17(2) of the Wage Code 2019 clearly states that it is necessary to pay the entire outstanding salary of the employee in the next two working days after the last working day. This will include your salary, remaining leave money and remaining dues. However, some amounts like gratuity will still be given on time under different rules.
Earlier companies used to delay
Till now the companies had up to 30 days to release the full and final. At times this process became even longer as FnF involved many dues like leave encashment, pending bonus and gratuity. Companies often tried to settle all payments at once, leaving employees to wait for weeks.
New labor code ended inequality
Ashish Philip, Executive Partner, Lakshmikumaran & Sreedharan, explains that the new labor law applies equally to all employees. Whether the employee voluntarily resigns, is fired, dismissed or is retrenched, FnF is mandatory within 48 hours. This is a huge change compared to earlier, when companies had up to 1 month’s time.
Big benefit for employees
- Now the long wait is over
- Companies will not be able to withhold salaries
- It will be easy to change jobs
- reduction in economic insecurity
- Increased responsibility for companies
With this new rule of the government, companies will have to make their HR and payroll process fast and transparent. Action is also possible on delay, making the rules even stricter.
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