How Should We Handle Full and Final Settlements: Cheque, DD, or Bank Transfer?

Friends,

I have a query regarding the mode of payment to be followed at the time of ensuring full and final settlement of an employee. Is it advisable to prepare a cheque/DD or effect a bank transfer to the account of the ex-employee? Is there any law governing this?

Thanks, Sriram N

Hi Sriram,

We do the final settlement via a cheque payment as most of the firms have salary accounts. It becomes easy for the people to cash it. Additionally, it is a quality requirement for us to mention the cheque number and the amount paid in the employee files.

Cheers! 🌟🌟🌟

It is advisable to give a cheque to the employee concerned. We follow the same. When leaving, we make the employee concerned sign on each and every document of full and final settlement so that we have proof of everything. According to the law, full and final settlement shall be given to the employee concerned within two days, effective from the day of his resignation.

Friends,

I have a query on the mode of payment to be followed at the time of ensuring full and final settlement of an employee. Is it advisable to prepare a cheque/DD or effect a bank transfer to the account of the ex-employee? Is there any law governing this?

Thanks,
Sriram N

Hi Sriram,

I have a certain clarification to ask. Does your full and final settlement include gratuity, any unpaid salary, statutory bonus, or PF? Because the above-mentioned settlements are statutory requirements. Hence, my suggestion is if your settlement includes all the above, it is better to have a written document as proof before crediting or issuing a cheque to the employee.

Cheers,
Attvar