Meaning of Full and Final settlement
Full and Final Settlement is the process when an employee quits an organization. It is actually the amount of money an employee receives after all the deductions after leaving the organization.
In some cases, the employee has to pay the organization in order to get his/her relieving letter.
The full and final settlement process needs to happen on an employee’s last working day at the organization.
However clearance usually takes time, it is a policy to do so within 30-45 days after the employee’s last working day.
For gratuity, the stipulation is 30 days after leaving the company, while bonuses must be paid within the specified accounting year.
Components that are part of F&F
The process of F and F
Step 1 Resignation in Writing
The first and foremost step in the final and full settlement is Resignation in writing. The Employee submits his resignation in writing
Step 2 Acceptance Letter
After sending the Resignation letter by the employee, Management in return will issue an acceptance letter to employee for his resignation.
Step 3 Process with HR
Along with the acceptance letter, Ask Employee to get signed No dues certificate from all the concerned department and give it to HR.
Then the HR department will satisfy itself that the form complete and fill in properly
Step 4 EL/PL/Gratuity/Bonus/ Salary balance
Employee’s leave balance EL OR PL balance/ Employee gratuity is payable or not/ Bonus payable to employee/ Salary due should check and verify.
Step 5 F&F statement
- F & F statement will be prepared by HR for the employee.
- Then it will send to the accounts department for necessary action at their end.
- Once the accounting department clears the statement, the HR will then prepare a final revision of the same and request the accounts department to prepare a cheque for the payable amount.
Step 6 Issue of cheque
The cheque along with a service certificate may be handed over to the employee and HR in particular.
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