Employees changing jobs in India may no longer have to wait weeks for their final salary. Under the country’s new Labour Codes, employers must now pay wage-related dues within two working days after an employee resigns or leaves the company. The rule, effective from November 21, 2025, aims to streamline the full and final settlement process, making it faster and smoother for both parties.
The new timeline primarily covers pending salary and leave encashment. However, other payments such as gratuity, provident fund, and certain bonuses continue to follow separate legal timelines. Employees should not expect every payment to arrive within the two-day window.
A full and final settlement typically includes unpaid salary, leave encashment, approved expense claims, incentives, and other eligible payments. Employers can also deduct amounts for notice pay, unpaid loans, taxes, or charges for company assets that were not returned.
The speed of the final payment also depends on how quickly the exit process is completed. Employees who finish the handover, return company property, submit expense claims, and update bank details generally receive their settlement without unnecessary delays.
The Labour Codes also encourage employees to update their nomination details. Correct records can help family members receive pending wage dues without legal complications in case of an unexpected situation.
This new law marks a significant change from the earlier practice, where many employees waited 30 to 45 days for their final payment. The faster timeline is designed to improve the exit process for both employees and employers. While some payments will still take longer, salary-related dues should now reach employees much sooner.
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