CuDel-full and final settlement process explained

1. Full and Final Settlement Process Explained Full and final settlement is commonly named FnF settlement, a process that starts when an employee leaves/resigns from an organisation or gets terminated by the employer. The motive of the settlement policy is to pay all leave balance, payments, bonuses, gratuity, etc. to the employees. Major Components of FnF Unpaid salary Deductions Pensions Gratuity Non-availed leaves and bonus

2. Let Discuss These Unpaid Salary Unpaid salary is defined as the wages paid by the company to the employee after resignation. It starts from the date of resignation till the last day of working in the organisation. Deduction It includes payable taxes like income tax, provident fund, professional tax and notice period compensation that was not served. The gratuity and leave encashment given to the employee are free from the tax deducted at source (TDS). Pensions Employees receive pensions by giving a life certificate after retirement. Pension is received by employees as per the Employee Provident Fund (EPF) scheme, with a minimum amount of INR 1,000 and a maximum of INR 7,500. In case when employees resign and join a new organisation during their working period, they made a significant contribution to the PF account. They can withdraw it after retirement or even earlier. Gratuity It is a monetary benefit provided by an employer to their employees for long-term work with their organisation. As per Government of India regulations, organisations with more than 10 employees are mandated to offer gratuity benefits. However, the benefits apply only if employees complete five years of service in an organisation. Recently, the Government of India announced its intention of bringing down the eligible service period for gratuity benefits to a year for contract workers only. These workers work for a fixed term. According to the rule, if the organisation fails to pay the gratuity amount in the stipulated time frame, it will be liable to pay the interest along with the amount. Non-availed Leaves and Bonus The non-availed leaves of employees are also subjected to encashment. As per the law, employees can get special credits and bonuses encashed and have them added to the eventual settlement amount. When Will You Get Your Full and Final Settlement? The HR department of an organisation handles all the transitions in the settlement process. And according to the FnF law in India, the final settlement needs to be done within 30-45 days from the employee’s last working day.

3. These Steps are Involved in the FnF process 1. Written Resignation The step is to give a written resignation letter to the concerned department of the organisation 2. Letter of Acceptance Once the organisation accepts your resignation letter, it sends you an acceptance letter back in a mail or written form. 3. Process within HR The no-dues certificate and acceptance letter of the employee are sent by the company to the HR department. 4. Check Leave Balance, Bonuses, gratuity and unpaid salary HRs will check employee CL/PL, bonuses and gratuity before calculating the unpaid salary. 5. FnF Statement HR, account and finance departments work together to issue the FnF statement to the employee. Conclusion Full and final settlement is a long and tedious process involving various steps. If the process does not go properly, it leads to employee dissatisfaction and dents the employer’s reputation. Kutumbh HRCare (Kaam Matlab Kutumbh) successfully carries out the FnF process for employees hired for different brands across India. It manages hiring, onboarding, salaries, along with a full and final settlement process of employees hired for different companies. Contact Kutumbh HRCare Now!