New Wage Code: Employees to get salary, full and final settlement in 2 days after resignation! Check details
The New Wage Code directs a company to pay the due salary and full and final settlement of wages within two days of the last working day of the employee.
- Most companies currently take 45 days to 60 days to process the full and final settlement.
- It is a common practice followed by most firms.
New Delhi: The New Wage Code, which is likely to be implemented tomorrow, directs a company to pay the due salary and full and final settlement of wages within two days of the last working day of the employee. The dues will have to be paid by the company in two days in case of resignation, dismissal or removal from employment and services, the new rules say. Most companies currently take 45 days to 60 days to process the full and final settlement. It is a common practice followed by most firms. However, this is all set to change with the new wage code in place.
Here’s what the New Wage Code says:
"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." (ALSO READ:
According to media reports, if the Modi government implements four labour codes on wages, social security, industrial relations and occupation safety, health and working conditions from tomorrow (July 1), there could be significant changes in salary restructuring, PF and gratuity component, working hours, and Earned Leaves. (ALSO READ: Sensex, Nifty end flat after choppy trade)
If these labour codes are implemented, the new wage code will have an impact on all of the previously mentioned factors. Because these are still early speculations, nothing concrete should be infered until the government formally announces the rules. (Banks well-positioned to withstand even severe stress scenarios: RBI Governor Shaktikanta Das)
Currently, 23 states have pre-published draught rules on these laws, and the Centre has completed the process of finalising draught rules on these codes in February 2021. On August 8, 2019, the central government notified four labour codes, namely the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020, and the Occupational Safety, Health, and Working Conditions Code, 2020.