Hi All,
I would like to understand the full and final settlement process (FNF) for a private limited company. We usually calculate salary from the 1st to the last day of every month and pay on the 7th of the following month. For example, the salary for October from 1st to 31st October 2021 was paid on 7th November 2021. We have recently incorporated a rule that in case of resignation, we will clear the dues within 45 days from the last working day. An employee resigned on 20th November 2021, and his notice period is accepted until 10th December 2021.
I would like to understand, in the case of resignation of this employee, should I pay his salary for the full month of November 2021? Or should I pay from 1st November 2021 until his resignation date, i.e., 19th November 2021, and the remaining salary of the notice period from 20th November to 10th December 2021 within 45 days? Alternatively, should I hold back the salary of November and the 10 days of December and pay all dues within 45 days?
Please clarify.
From India, Mumbai
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I would like to understand the full and final settlement process (FNF) for a private limited company. We usually calculate salary from the 1st to the last day of every month and pay on the 7th of the following month. For example, the salary for October from 1st to 31st October 2021 was paid on 7th November 2021. We have recently incorporated a rule that in case of resignation, we will clear the dues within 45 days from the last working day. An employee resigned on 20th November 2021, and his notice period is accepted until 10th December 2021.
I would like to understand, in the case of resignation of this employee, should I pay his salary for the full month of November 2021? Or should I pay from 1st November 2021 until his resignation date, i.e., 19th November 2021, and the remaining salary of the notice period from 20th November to 10th December 2021 within 45 days? Alternatively, should I hold back the salary of November and the 10 days of December and pay all dues within 45 days?
Please clarify.
From India, Mumbai
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In the given case, the salary for November has to be paid on the 7th of December along with the payroll of your company, together with the list of your working employees in the payroll. Your calculation should only include the days actually worked and any authorized leave with pay, if applicable.
For the December salary, you may process it along with the Full and Final (F&F) settlement as you need to remit PF and other contributions. You will need to compute dues such as gratuity if eligible under the Act and based on completed stipulated service requirements, etc., using the December salary. If it is a factory, as per the law, the leave salary for the remaining leave days has to be settled within 2 days of exit, which you should kindly take note of.
Thank you.
From India, Chennai
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321For the December salary, you may process it along with the Full and Final (F&F) settlement as you need to remit PF and other contributions. You will need to compute dues such as gratuity if eligible under the Act and based on completed stipulated service requirements, etc., using the December salary. If it is a factory, as per the law, the leave salary for the remaining leave days has to be settled within 2 days of exit, which you should kindly take note of.
Thank you.
From India, Chennai
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