Within how many days must final settlement be paid after an employee exits?

Under the new Code on Wages, final wages must be paid within two working days of an employee’s removal, dismissal, retrenchment, or resignation. This is a tighter standard than the customary practice many companies followed, where full-and-final settlements were often completed over several weeks, and the provision’s operational rollout is still settling as state rules are finalised.

In practice, final settlement involves more than just wages — leave encashment, any pending reimbursements, and gratuity (which has its own 30-day timeline) are also part of the exit dues. Employers should align their offboarding process with the statutory expectation of prompt payment and issue a clear settlement statement. Employees facing unreasonable delay can raise the matter with the relevant labour authority.