New Labour Law 2025: How to Get Full & Final Settlement in 2 Working Days

Labour law is a pressing issue for today's public, as the number of people working in any country continues to grow every year. Many of these employees work 9-5 jobs, but they often face the challenge of how long it will take to receive their full and final settlement, or "FNF," after leaving their job.

Before the onset of changes made by the government regarding the new Labour  Code, it was common to see workers held up anywhere from 30 to 60 days waiting on their FNFs. However, with the changes made in the Labour Code, the way FNFs are processed has changed considerably, thereby providing employees with a reduced waiting period prior to receiving their FNFs.

Why did FNF take so long before?

In the past, companies were required to perform a final and complete payment of an employee's wages within 30 days after termination of employment. However, this requirement was often ignored by many organizations, especially within the private sector. Many organizations held back wages for 45-60 days before making the final payment to their employees.

Employees were frequently sending emails and contacting HR to check on their final payments with no response from HR. An overwhelming majority of working adults have experienced the frustration of this type of situation.

Now the rules have completely changed due to New Labour laws.

Under Section 17(2) of the New Wage Code 2019, an employer must complete processing a former employee’s FNF within two working days from the last working day of that person. This is the case for:

• Resigned employees
• Terminated employees
• Retired employees

Employers are required to pay out the FNF no later than the end of the second working day after the employee's most recent working day. Employers cannot hold onto an employee's money beyond this deadline and employees will no longer face delays of weeks before receiving their final paycheck.

The true meaning of a working day

Two days do not refer to two calendar days; they will be classified as the days the company will be open and doing business.

•  If Saturday and Sunday are holidays, then those two will not be counted.
• If you have a holiday for your festival, then you won't be able to count that date as a holiday or a day when the business is closed.

What do you receive under FNF?

As a part of the Full and Final Settlement, you'll receive multiple payments from your company:

• Your Salary for the Notice Period
• Any Encashment of Remaining Leave (Earned Leave/Privileged Leave)
• Any Unpaid Salaries and Bonuses
• Any Reimbursements/Incentives
• Any Other Outstanding Amounts

As before, the same rules apply for Gratuity, Provident Fund and all benefits; with new rules, any employee can rest assured they will no longer need to be concerned about having to recover their money.

These Labour law on minimum wages has also become stricter: companies will not be able to hire at lower salaries.

For millions of workers, an additional major benefit has been the introduction of new Minimum Wage Rules by the Government. Companies cannot hire personnel on or after 1st June 2022 for any position on a salary lower than the minimum floor wage stipulated by the Minimum Wage Act.

What is a floor wage?

A wage that acts as a foundation for all employees across the nation is a federal minimum wage.

• No employee can receive less than this.
• It is prohibited to lower wages already exceeding this level.

In summary, an excellent base has now been established at the national level regarding minimum wage. 

Why are salaries not uniform?

According to the new rules, wages will depend on three factors:

1. Skill – unskilled, semi-skilled, skilled, and highly skilled
2. Location – metro, tier-2 cities, rural areas
3. Nature of work

The minimum wage for skilled workers living in metro cities will be higher than that of unskilled workers in villages, but in no case lower than the floor wage.

How is the minimum wage determined?

By establishing this figure, the government recognises the following factors as priorities:

• Feeding families
• Housing and shelter needs
• Clothes
• Educational costs for children
• Electricity and water
• Medicine and everyday items
• Future security

Consequently, unlike other salary types, the base salary must enable individuals to live a life of dignity.

What are the new changes for companies based on Labour laws?

Companies will now be required to adhere to digital payments and transparency. If a company pays less than the minimum wage, it will be considered a crime. This will result in:

• Heavy fines
• A case in the Labour Court
• And even imprisonment.

Employees can now complain about their low wages directly to the Labour Court.

 What will the new Labour law change?

These new changes have created a safer environment for working people.

• No more waiting for FNF
• No more arbitrary minimum wages
• Every worker gets fair pay for their hard work

This government move offers a new ray of hope for millions of people who have been facing salary withholding or low wages for years.

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