How to mail to HR for full and final settlement?
July 11, 2023By Advocate Chikirsha Mohanty हिंदी में पढ़ें
Table of Contents
- What is Full and Final Settlement/ FnF Settlement in payroll?
- What components are used to decide the Full and Final Settlement / FnF Settlement sum?
- What is the period of processing the Full and Final/ FnF Settlement?
- What necessary measures that an employee must do to ensure no complications?
- Under which law can an employee seek relief?
- Full and Final Settlement under Code on Wages, 2019
- Why do you need a lawyer at the time of Full and Final Settlement?
- What is the general mail format requesting the Relieving Letter and Full and Final settlement from HR?
- What is the general mail format in case of delay in the processing of the Full and Final Settlement/ FnF Settlement by HR?
- What is the general format of a Full and Final Settlement Letter from HR to the employee?
What is Full and Final Settlement/ FnF Settlement in payroll?
When an employee is leaving the company, he has to get paid for the last working month. This procedure of paying or recovering during the resignation process is called Final Settlement.
Final settlement can be done on the last working payroll month or subsequent months. The employee can be settled first and then resigned or you can resign an employee and then do the final settlement at a later date.
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What components are used to decide the Full and Final Settlement / FnF Settlement sum?
The following are the components that go into determining the Full and Final Settlement/ FnF Settlement sum:
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?Unpaid Salary (including annual benefits such as leave travel allowance) and arrears, which is calculated as the number of days for which salary is to be paid multiplied by the gross salary divided by 26 (paid days in a month)
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Unpaid bonus
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Payment for non-availed leaves, which is calculated as the number of days of non-availed leave multiplied by basic salary divided by 26.
Apart from the usual components, the following might be applicable:
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Gratuity, if four years and 240 days have been completed. It should be offered within 30 days of the resignation. Gratuity is dealt with by the Gratuity Act 1972. If the employee fails to pay gratuity, they will have to pay with interest.
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Pension, as long as the employee has completed at least 6 months of service with the existing employer and 10 years of pensionable service on providing Scheme Certificate after retirement age.
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Deductions include profession tax (if applicable), provident fund, ESIC, income tax, and compensation for the notice period not served.
What is the period of processing the Full and Final/ FnF Settlement?
As far as the period for settlement is concerned, the final settlement needs to happen on an employee's last working day at the organization. However, as clearances take time, it is a prevalent policy to do so within 30-45 days after the employee has left.
For gratuity, the stipulation is 30 days after leaving the company, while bonuses must be paid within the specified accounting year.
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What necessary measures that an employee must do to ensure no complications?
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Make sure to settle any advances taken or get them adjusted in the final settlement.
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Get a copy of all the various clearances required from the different departments of the organization that you were attached with.
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Refer to the standing orders of the company, employee rule book, HR policy handbook, etc. All such policies should be kept within the reach and knowledge of the employee. If these policies are not available you may demand these and also try and obtain them from some colleague.
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Instead of making verbal communications you should address written representation under acknowledgment to your HR contact and narrate all representations by phone (mention phone numbers, date, time, etc.) and minutes of discussion, followed by escalation to MD, Chairman, Company Secretary, with a copy to Head-HR and raise your queries.
Under which law can an employee seek relief?
An employee can seek relief under the Industrial Employment Standing Orders Act, SE Act applicable to the state, Payment of Wages Act, and ID Act as per the explanation of the employee under these enactments or through Civil Court.
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Full and Final Settlement under Code on Wages, 2019
The Code on Wages, 2019 seeks universalization of the laws related to the timely payment of wages and minimum wages to the employees. Besides quicker settlements, the Code on Wages has increased applicability to a broader class of employees. The provision related to the early settlement of dues has maximized coverage by extending the applicability of provisions to the unorganized sector.
The Payment of Wages Act, which, at present, lays down a timeline to make payment of wages. The Act is silent on a lot of matters including the full and final settlement if an employee resigns. The Code on Wages is more likely to bring better compliance and clarity once it is implemented.
Why do you need a lawyer at the time of Full and Final Settlement?
If your salary and dues have not been paid even after the due dates, you can take legal action against the employer and for this, you should hire a lawyer . If you are aggrieved, you can send a legal notice, or approach the labour commissioner, the labour court, the civil court, or the NCLT. However, a lawyer will be able to guide you best as to what direction you should take, depending upon the facts and circumstances of your particular case. He/she is an expert in such matters and will help you find the best way out and take care of all the legal documentation and appearances in court.
What is the general mail format requesting the Relieving Letter and Full and Final settlement from HR?
The GM- HR,
......................(Name of Company)
Re: Issuance of Relieving Letter and Full & Final Settlement
Dear Sir / Madam [HR Representative],
I am writing to request the Full and Final Settlement and Relieving Letter for my employment with [company name]. As you are aware, my last day of work was [date], and I have completed all of my pending tasks and handed over my responsibilities to my successor.
I would like to request the Full and Final Settlement and Relieving Letter at the earliest, as I require these documents for future job applications and other purposes. The settlement should include the remaining compensation owed to me, as well as any outstanding benefits and allowances.
I kindly request an update on the status of the settlement process and when I can expect to receive the settlement amount and the relieving letter. I would appreciate your prompt attention to this matter, as any delay could cause undue hardship for me.
Thank you for your attention to this matter. Please let me know if there is any additional information or documentation that I can provide to help facilitate the settlement and relieving letter process.
The details are as below:
Name :
Employee Code :
Designation :
Project :
Date of resignation :
Thanking you
Kind Regards
..........(Name)
..........(Current Address)
What is the general mail format in case of delay in the processing of the Full and Final Settlement/ FnF Settlement by HR?
The GM- HR,
......................(Name of Company)
Re: Issuance of Full & Final Settlement
Dear Sir/ Madam [HR Representative],
I am writing to follow up on the full and final settlement for my employment with [company name]. Despite several reminders, I have not received any communication or settlement amount from your side.
As per our employment contract and company policy, I am entitled to receive the remaining compensation owed to me, as well as any outstanding benefits and allowances. However, it has been [number of days/weeks/months] since my employment ended, and I am yet to receive the settlement amount.
I would like to request an update on the status of the settlement process and when I can expect to receive the settlement amount. The delay in the settlement has caused undue financial stress and inconvenience for me, and I would appreciate your immediate attention to this matter.
Please note that the delay in the settlement is causing me hardship and has left me with no option but to seek legal advice. I would like to avoid this situation and hence request that you settle the dues in a timely manner.
Thank you for your attention to this matter. I look forward to hearing from you soon.
The details are as below:
Name :
Employee Code :
Designation :
Project :
Date of resignation :
Thanking you
Kind Regards
..........(Name)
..........(Current Address)
What is the general format of a Full and Final Settlement Letter from HR to the employee?
[Company Letterhead]
[Date]
[Employee Name]
[Employee Address]
[City, State, Postal Code]
[Employee Email]
Subject: Full and Final Settlement Letter
Dear [Employee Name],
We regret to see you leave the organization but we would like to thank you for the valuable contributions you made during your tenure with [company name]. As you are aware, your last working day was on [date], and all of your pending tasks have been completed, and the responsibilities have been handed over to your successor.
We have processed your Full and Final Settlement, which includes the remaining compensation owed to you, as well as any outstanding benefits and allowances. Please find below the details of your settlement:
Salary in lieu of notice period: [amount]
Payment of earned leave days: [amount]
Provident Fund (PF): [amount]
Gratuity: [amount]
Any other benefits or allowances: [amount]
Total: [amount]
Please note that this settlement amount has been calculated based on the information available to us. If you have any discrepancies or concerns, please let us know as soon as possible so that we can address them.
The settlement amount will be credited to your bank account, and you should receive a confirmation email once the transfer has been made. Please ensure that the bank account details provided to us are accurate.
We would like to take this opportunity to remind you that you have signed a confidentiality and non-compete agreement with our organization, which is binding even after the termination of your employment.
We thank you for your cooperation throughout your tenure with us and wish you all the best for your future endeavours.
Sincerely,
[HR Representative]
[Company Name]
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Comments by Users
Vivek
In company after 3 months they took 2 months gross salary as notice pay and denied to give relieving and experience certificate.
What should i do now?
Reply by LawRato
One can approach the Court for non-payment of dues /salary. You can contact a lawyer and send a legal notice to the said Company to initiate the legal proceedings. However, since your question is specific and requires more information in order to guide you better, it is advised that you click on the link below and send in your query for Free Legal Advice.
niranjan
Your reply was very precise !
What action can be taken if the employer does not pay the performance pay which is part of the employee's CTC, during final settlement???
Reply by LawRato
An employer is liable to pay the full and final (FnF) amount after the termination of employment of an employee. In case, the employer is withholding an amount which forms part of the FnF, you may send them a legal notice followed by filing a civil suit for recovery. It is also advised to engage the services of a labour lawyer.
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