Business Desk: Changing jobs or leaving employment is a normal part of every professional’s career. However, until now, employees often had to wait weeks—or even months—to receive their own hard-earned money. Full and Final (FnF) settlements typically took 40–45 days, and in some cases up to 90 days, causing financial stress and uncertainty.
That long wait is now set to end. Under the government’s new labour law, employees will receive their complete dues within just two working days of leaving their job.
From 45 Days to Just 2 Days
Earlier, after resignation or termination, payments were delayed due to lengthy paperwork and internal processes. Employees were often stuck juggling a new job while chasing their previous employer for dues.
But under the new rule, effective April 1, 2026, companies will be required to clear all pending payments within two working days, regardless of the reason for exit. This ensures employees no longer have to depend on companies for timely access to their earnings.
What Is the New Labour Rule?
This major reform has been introduced under the Code on Wages, 2019.
As per the law, whether an employee resigns, is terminated, or the company shuts down, all dues must be settled within two working days. Companies will no longer be able to delay payments citing administrative procedures. This strengthens employee rights significantly.
What Does FnF Settlement Include?
A Full and Final settlement is not limited to the last month’s salary. It includes:
- Final Salary: Payment up to the last working day
- Leave Encashment: Compensation for unused leaves
- Bonus & Incentives: Pending performance-based payouts
- Gratuity: In some cases, applicable even after 1 year of service; must be paid within 30 days
- Reimbursements: Expenses incurred for official work
- Deductions: Taxes, advance salary, loans, or unreturned company assets
Big Relief for Employees
This new rule is expected to bring major relief to salaried professionals. It will not only reduce financial pressure but also increase corporate accountability. The biggest question employees faced while leaving a job—“When will I get my money?”—may soon become a thing of the past.
