Full and Final Settlement

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1

Hello Everyone

  • Is there any compliance or mandate or any law related to full and final settlement.?
  • Is it mandatory to pay remaining leaves in the Full and final settlement or it depends on company policy?
  • In how many days it should be done?
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2

Hi,

  1. There is no mandate or law related to Full and Final settlement. But yes, as a compliance and as per company standing order one should get their Full an Final settlement within 30-45 days.
    2.As per law paying leave encashment is not mandatory and it depends on company policy.
  2. No. of days depends on state to state. Kindly check accordingly.
    For Eg:
    PL/EL: 1.25 days credit on every 20 physical days completion. As per Karnataka.
    SL/CL: 1 day credit on every month.

Regards
Arpana

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3

  1. As per Payment of Wages act, FULL & FINAL SETTLEMENT SHOULD BE DONE BY EXPIRY OF THE SECOND WORKING DAY FROM THE DAY FROM WHICH EMPLOYEE WAS EFFECTIVELY TERMINATED

  2. Leave Encashment is not a mandatory and it depends on Company Policy and also on State Shops & Establishment Act

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