India’s workforce is set to benefit from a landmark change as the latest labour regulations mandate that employers clear full-and-final (FnF) settlement dues within just two working days of an employee’s exit.
The reform applies across all types of separations — voluntary resignation, termination, or dismissal — ensuring employees receive pending salaries, leave encashments, and other dues promptly. This move marks a significant departure from previous practices, where final settlements could take several weeks, creating uncertainty and financial strain.
HR experts note that while this regulation strengthens employee rights and transparency, it also requires companies to streamline exit processes, including asset returns, clearance of formalities, and payroll systems, to comply with the tight two-day timeline.
By accelerating FnF payments, the new rule aims to provide employees immediate financial closure, reduce stress during career transitions, and foster trust in organisational processes. It also reinforces accountability, prompting organisations to adopt more structured and efficient HR workflows.
The change is widely expected to redefine standard exit practices, making timely settlements a norm and setting a new benchmark for fair treatment of departing employees.
Source – https://www.bwpeople.in/article/employees-to-receive-full-final-settlement-within-two-days-581477