A big good news for workers and employees. After the implementation of the new labor code of the central government, now the employee will not have to wait for months to get his arrears. If you are quitting a job from a company or you are being fired, then you will have to settle all the accounts and pay the money to the company within just 2 working days. This new system has been implemented under the Code on Wages, 2019. Earlier, it took 30 to 90 days for employees to get their arrears of salary and other amounts after quitting the job. Due to this, the employees were facing a lot of problems in paying house rent or meeting monthly expenses. But now according to the new rules, it is mandatory to make the settlement within just 48 hours of the last working day of the job.
What will be available in ‘Full and Final’ settlement?
When an employee leaves the company, he gets not only salary but also other benefits:
Last month’s salary: Salary due based on the days worked
Money in lieu of leave: Fixed amount for the leave left
Bonus and incentives: Bonus due based on performance
If an employee has not returned company property like mobile etc. or has taken an advance loan, then the company will deduct that amount and give the remaining amount. The most surprising and beneficial change in the new labor code is gratuity. According to the old rules, it was necessary to work in an organization for at least 5 years for gratuity. However, now the employee will be entitled to gratuity even after just one year of employment. The company has to pay this amount within 30 days. Although there is a rule for settlement within 2 days, it can go up to a maximum of 1 month according to some special circumstances and company policies. However, the new rule is said to be a strong step in keeping in mind the financial security of the employees.
