Resigned or fired? Employees will now get full and final settlement money in just 2 days under new labour law

According to the new labour code, companies are required to pay your full and final settlement money within two working days. In the past, some companies would issue the FnF on the last working day while some paid within the statutory timeframe of about 30 days. Sonakshi Das, Partner – JSA, said to ET Wealth Online that under the Code on Wages, 2019 (Wage Code), ‘Wages’ here is to be construed as having the meaning as defined under the Wage Code—and any part of an employee’s full and final settlement that qualifies as ‘wages’ under the Wage Code, is likely to be required to be paid out within the prescribed time. According to Das from JSA, in other words, based on a strict interpretation, components of an employee’s full and final settlement that do not qualify as ‘wages’ under the Wage Code, or fall within the exclusions to the ‘wages’ definition—for instance, gratuity on termination, for which, different payout timelines are prescribed—is likely to not be viewed as mandatory for release within the two-working days timeline. Das said: “For these components, applicable timelines and thresholds if and as prescribed under the Wage Code and corresponding rules, will need to be assessed. With time and further developments, clarity on this interpretation can be expected. Read more