Hi, is it legally valid for an organization to process the final payment to an employee within 30-45 days (or as per company policy) from the last working day? Are there any statutory guidelines or timelines mandated under Indian labor laws for full and final settlements?
From India, Kochi
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13From India, Kochi
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Hello,
In India, the Payment of Wages Act, 1936, governs the rules and regulations concerning the disbursal of wages to employees. As per the Act, the final settlement should ideally be made on the employee's last working day. However, if the settlement cannot be made immediately due to certain reasons, the Act prescribes that the final settlement should be made within the first and second working day after the last working day.
However, in practice, many organizations take a bit longer to process the final settlement due to various administrative and operational reasons. In such cases, companies usually make the full and final settlement within 30-45 days from the employee's last working day, which is generally accepted by the labor departments provided there are no disputes or issues related to the settlement.
Here are some steps you might follow if you have issues with your final settlement:
🤩 1. Speak to your HR Department: If you haven't received your final settlement within the duration specified by the company policy, try contacting your HR department for an update.
🤩 2. Written Communication: If there's no response or solution from the HR, escalate the matter by writing an official email to the HR department with all the necessary details.
🤩 3. Legal Notice: If the company still doesn't respond, you can consider sending a legal notice through a lawyer.
🤩 4. Legal Action: If the issue persists, you may want to consider filing a complaint with the labor court.
Please note that these steps are for guidance, and actual steps may vary depending on your circumstances.
Remember, it's always advisable to keep all your employment documents, salary slips, and other related documents handy while dealing with such issues.
🤗 Good luck!
From India, Gurugram
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In India, the Payment of Wages Act, 1936, governs the rules and regulations concerning the disbursal of wages to employees. As per the Act, the final settlement should ideally be made on the employee's last working day. However, if the settlement cannot be made immediately due to certain reasons, the Act prescribes that the final settlement should be made within the first and second working day after the last working day.
However, in practice, many organizations take a bit longer to process the final settlement due to various administrative and operational reasons. In such cases, companies usually make the full and final settlement within 30-45 days from the employee's last working day, which is generally accepted by the labor departments provided there are no disputes or issues related to the settlement.
Here are some steps you might follow if you have issues with your final settlement:
🤩 1. Speak to your HR Department: If you haven't received your final settlement within the duration specified by the company policy, try contacting your HR department for an update.
🤩 2. Written Communication: If there's no response or solution from the HR, escalate the matter by writing an official email to the HR department with all the necessary details.
🤩 3. Legal Notice: If the company still doesn't respond, you can consider sending a legal notice through a lawyer.
🤩 4. Legal Action: If the issue persists, you may want to consider filing a complaint with the labor court.
Please note that these steps are for guidance, and actual steps may vary depending on your circumstances.
Remember, it's always advisable to keep all your employment documents, salary slips, and other related documents handy while dealing with such issues.
🤗 Good luck!
From India, Gurugram
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Dear Priya Lakshmi,
The settlement of the F&F is considered illegal if it is done even after 24 hours of the last working day because the timeline is as per the Payment of Wages Act, 1936. The F&F settlement within 30/45 days is out of the question but can be considered sound provided the employee gave his consent or there is an existing contractual agreement.
From India, Mumbai
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The settlement of the F&F is considered illegal if it is done even after 24 hours of the last working day because the timeline is as per the Payment of Wages Act, 1936. The F&F settlement within 30/45 days is out of the question but can be considered sound provided the employee gave his consent or there is an existing contractual agreement.
From India, Mumbai
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Code of Wages: Payment Timelines
As per the Code of Wages, yet to come into force, the timeline is 2 days:
(1) The employer shall pay or cause to be paid wages to the employees, engaged on:
(i) a daily basis, at the end of the shift;
(ii) a weekly basis, on the last working day of the week, that is to say, before the weekly holiday;
(iii) a fortnightly basis, before the end of the second day after the end of the fortnight;
(iv) a monthly basis, before the expiry of the seventh day of the succeeding month.
(2) Where an employee has been:
(i) removed or dismissed from service; or
(ii) retrenched or has resigned from service or became unemployed due to closure of the establishment, the wages payable to him shall be paid within two working days of his removal, dismissal, retrenchment, or, as the case may be, his resignation.
From India, Chennai
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As per the Code of Wages, yet to come into force, the timeline is 2 days:
(1) The employer shall pay or cause to be paid wages to the employees, engaged on:
(i) a daily basis, at the end of the shift;
(ii) a weekly basis, on the last working day of the week, that is to say, before the weekly holiday;
(iii) a fortnightly basis, before the end of the second day after the end of the fortnight;
(iv) a monthly basis, before the expiry of the seventh day of the succeeding month.
(2) Where an employee has been:
(i) removed or dismissed from service; or
(ii) retrenched or has resigned from service or became unemployed due to closure of the establishment, the wages payable to him shall be paid within two working days of his removal, dismissal, retrenchment, or, as the case may be, his resignation.
From India, Chennai
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The reply is mostly accurate, however, it's important to note that the Code of Wages 2019 is yet to be fully implemented and until it comes into force, the Payment of Wages Act, 1936 applies. As per the existing Act, the employer is obligated to pay all dues to the employee within the first and seventh day of the month. However, in case of termination, the employer needs to settle all dues within two working days.
Regarding your specific query about the final settlement timeline, this depends on various factors such as the company's policy, the nature of the employment contract, and the circumstances of the termination. It's always advisable to look into your employment contract and consult with a legal professional to get a clearer picture.
In practice, many companies in India do take 30-45 days to process the full and final settlement. This is often because the process involves multiple departments (like HR, finance, admin, etc.) and a number of formalities. In the case of any delay beyond the stipulated time as per your employment contract, you can legally claim interest for the delay.
Lastly, please keep in mind that this information is based on general practices and laws, and may vary based on specific circumstances. If you feel your rights are being violated, consider seeking legal counsel.
From India, Gurugram
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Regarding your specific query about the final settlement timeline, this depends on various factors such as the company's policy, the nature of the employment contract, and the circumstances of the termination. It's always advisable to look into your employment contract and consult with a legal professional to get a clearer picture.
In practice, many companies in India do take 30-45 days to process the full and final settlement. This is often because the process involves multiple departments (like HR, finance, admin, etc.) and a number of formalities. In the case of any delay beyond the stipulated time as per your employment contract, you can legally claim interest for the delay.
Lastly, please keep in mind that this information is based on general practices and laws, and may vary based on specific circumstances. If you feel your rights are being violated, consider seeking legal counsel.
From India, Gurugram
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(Fact Checked)-Your response is accurate as per the Code of Wages, 2019. It indeed mandates payment within two working days in the scenarios you mentioned. (1 Acknowledge point)