My Full and Final Settlement Is Not Paid Months After I Left: Deadlines, Where to Claim and How to Serve the Company

If your full and final settlement is not paid, most of the law is already on your side. Section 17(2) of the Code on Wages, 2019 requires the wages of an employee who has resigned, or been removed, dismissed or retrenched, to be paid within two working days. Leave encashment carries the same clock under Section 32 of the Occupational Safety, Health and Working Conditions Code, 2020 for workers, and under Section 15(13) of the Karnataka Shops and Commercial Establishments Act, 1961 for anyone in a Bengaluru shop or office. Gratuity has thirty days under Section 56(3) of the Code on Social Security, 2020, with interest after that. "Processing" is not a defence to any of these.

Part of the employment and labour law practice at S Jain & Attorneys, Bangalore.

This page is for the person who left months ago with a relieving letter and a settlement statement that never became money, and whose legal notice has just come back marked insufficient address. Whether the exit itself was lawful is covered in our guides on wrongful termination and resignations obtained under pressure.

How long can my employer take to pay my full and final settlement?

Two working days for wages and for leave encashment, thirty days for gratuity, and no statutory clock at all for the contractual heads. Check the table against your own dates first.

There is no thirty or forty five day settlement cycle in the Code on Wages. A payroll policy is a policy, and Section 17(2) is a statute. The clock covers more than basic pay, because the second proviso to Section 2(y) brings house rent allowance, conveyance, overtime and award pay into wages for the purpose of payment.

Deadline warning. The payment clock is two working days, but the claim clock is three years. Section 45(6) of the Code on Wages allows an application within three years from the date the claim arises, and later only on sufficient cause being shown.

The four numbers that decide most of these disputes.

What exactly is in a full and final settlement, and which parts have a legal clock?

A settlement statement usually bundles six things, and only four have a statutory deadline: wages, leave encashment, gratuity and statutory bonus. The rest is contract.

Leave encashment has two sources. Section 32(1)(vi) of the OSH Code entitles a worker who is discharged, dismissed or quits to wages in lieu of the leave held immediately before leaving, paid before the expiry of the second working day. Section 15(13) of the Karnataka Act has no worker cap: leave not taken is paid at the Section 16 rate, before the second working day if the employer terminated you, on or before the next pay day if you quit. A manager in a Bengaluru office pleads the Karnataka Act.

Section 56(2) of the Code on Social Security requires the employer to determine and notify the amount whether or not you applied, Section 56(3) gives thirty days, and Section 56(4) adds simple interest at a rate not exceeding the notified long term deposit rate. Eligibility and the ceiling are in our note on gratuity under the Code on Social Security. Statutory bonus, where the bonus chapter applies, is due within eight months of the close of the accounting year under Section 39(1).

Notice pay owed to you, variable pay, reimbursements, a joining bonus balance, relocation: none has a statutory clock. They are recovered by civil suit within three years, under Article 55 of the Schedule to the Limitation Act, 1963 for breach of contract or Article 7 for wages. Provident fund is not a settlement head at all: it sits in your EPFO account.

Can they hold my F&F because I did not serve my notice period?

They can claim notice pay from you under the contract, but they cannot keep your earned wages to cover it, because Section 18(1) of the Code on Wages bars every deduction the Code does not itself authorise, notwithstanding any other law. The Section 18(2) list is closed: fines, absence, loss of entrusted goods caused by your neglect, advances, approved loans, tax, court orders, social security contributions and the like. Notice pay shortfall is not on it, and Section 18(3) caps all deductions in a wage period at fifty per cent of wages.

The usual answer is that nothing is deducted, two accounts are netted, and the Explanation to Section 18(1) answers it by treating any payment by an employee to the employer as a deduction. The only notice linked deduction in the Code is the proviso to Section 20(2), ten or more employees leaving in concert without notice, up to eight days' wages. What the employer keeps is a claim under Section 74 of the Indian Contract Act, 1872, reasonable compensation not exceeding the sum named, which it must prove in a suit or counterclaim rather than net off.

Common mistake. Signing a no dues or release form to get the relieving letter, for a figure you know is short. You can still contest it, but the form becomes the employer's first exhibit and the hearing turns on your signature instead of their arithmetic. Take the letter, decline the form, and say why in writing the same day.

Can they hold my relieving letter or experience letter until I sign?

For a worker in an establishment covered by the standing orders chapter, no: the Model Standing Orders, 2026 entitle every worker to a service certificate within ten days of discharge, termination, retirement or resignation. For everyone else the relieving letter is a contractual courtesy no Karnataka statute compels.

The orders were notified as S.O. 2312(E) on 8 May 2026 under Section 29(1) of the Industrial Relations Code, 2020. Schedule C, for the service sector, provides in order 14(1)(ii) for a service certificate within ten days, and its order 13(3) repeats the two working day wage rule. Section 28 applies the chapter to industrial establishments with three hundred or more workers, and the model orders run only until the establishment's own certified orders come into force under Section 29(2). A manager, or a supervisor above the Rs 18,000 line, is not a worker.

The Karnataka Act requires an appointment order within thirty days of joining under Section 6A and says nothing about a letter on the way out. Ask for the letters and the money as separate items in writing, and if the letter is still withheld, tell the new employer why and offer the resignation acceptance email and the last payslips, which carry the dates a background check needs.

Where do I complain when my full and final settlement is not paid and HR keeps saying processing?

Wages, leave encashment and unauthorised deductions go to the claims authority under Section 45 of the Code on Wages, gratuity goes to the competent authority under the Code on Social Security, and the contractual heads go to a civil court.

Section 45(1) lets the appropriate Government notify authorities, not below the rank of a Gazetted Officer, to hear claims under the Code. For a private establishment that is the State Government under Section 2(d), so the application goes to the officer the Karnataka Government has notified for the area of the establishment, reached through the jurisdictional office of the Karnataka Labour Department. Section 45(2) is the reason to file: the authority may add compensation of up to ten times the amount found due, and is asked to decide within three months. If the order is not honoured, Section 45(3) requires a certificate of recovery to the Collector, who recovers the sum as arrears of land revenue. Appeals go within ninety days under Section 49.

Two tracks run beside the claim. Paying less than the amount due is an offence under Section 54(1)(a), fine up to fifty thousand rupees: a prosecution, not your recovery, but a fact the demand letter can state. Money owed under a settlement or an award is recovered under Section 59 of the Industrial Relations Code, explained in our note on recovering money due from an employer under Section 59. The contractual balance goes to a money suit within three years, with court fee on the sum claimed, as set out in our guide on money recovery suits.

Key takeaway. The Section 45 authority can add up to ten times the sum found due and enforces through the Collector as land revenue. No email chain with HR does any of that.

My legal notice came back "insufficient address": how do I serve a company so it sticks?

Serve it at the registered office shown on the Ministry of Corporate Affairs record, by registered post or speed post, because Section 20(1) of the Companies Act, 2013 makes that good service on the company. The floor you sat on is often not the registered office at all.

Section 20(1) allows service by registered post, speed post or courier to the registered office, by leaving the document there, or by the prescribed electronic mode. Look the company up on the MCA portal's company master data, take the registered office, the registered email and the directors' names, and address the notice there for the attention of the directors.

Section 27 of the General Clauses Act, 1897 is what makes registered post stick: where a Central Act authorises service by post, service is deemed effected by properly addressing, pre-paying and posting by registered post, at the time the letter would arrive in the ordinary course, unless the contrary is proved. Keep the receipt and the tracking printout: an envelope returned refused or unclaimed from the registered office shifts to the company the burden of proving it never arrived. At the suit stage, Order XXIX rule 2 of the Code of Civil Procedure allows summons on a corporation by post to the registered office as well.

The service checklist, in four cards.

Step by step: from the demand letter to a recovery certificate

This sequence gets most settlements paid without a suit, and builds the file for one if it is needed.

1. Assemble the file: the Section 6A appointment order, every payslip, the resignation and its acceptance, the relieving letter, the settlement statement, your leave balance, and every "processing" email with its date.
2. Compute each head with its section beside it: wages under Section 17(2), leave under Section 32 or Section 15(13), gratuity under Section 56, bonus under Section 39, the contractual heads by clause.
3. Send an itemised demand to the registered office by registered post and to the registered email, with ten to fifteen days to pay. No statute requires it before a Section 45 claim, but it fixes the figures and the date of default.
4. File the Section 45 application with the claims authority for the area: heads, computation, documents, the deductions Section 18 does not permit, and a specific request for compensation under Section 45(2).
5. If gratuity is unpaid after thirty days, file separately with the competent authority under the Code on Social Security, claiming interest under Section 56(4).
6. At the hearing, ask the authority to use its civil court powers under Section 45(7) to call for the muster roll and wage register kept under Section 50(1). The employer's own records usually settle the arithmetic.
7. If the order is not paid, ask for the certificate of recovery to the Collector under Section 45(3).
8. For the contractual balance, file the civil suit within three years, with the demand letter and postal receipts as the first exhibits.

What it costs, how long it takes, and what I tell people at the first meeting

Indicatively, a demand letter and a Section 45 application cost a fraction of the sums usually at stake, because the application is built to be filed without a lawyer and the Code asks for a decision within three months, though a contested claim runs several months to a year or more with adjournments and an appeal. A civil suit costs more, since court fee follows the sum claimed and suits run for years.

What I tell people at the first meeting is that the money and the paperwork are two different fights, and that the first is mostly arithmetic. Employers rarely deny the salary was earned. They net things off, notice pay, a laptop, a training bond, a bonus clawback, and where these cases actually turn is on whether each set off is on the Section 18 list. The second thing is that the file wins the claim before anyone argues it. The third is that delay is the employer's friend. The three years under Section 45(6) has not, and filing is how you stop the clock working for the other side.

The employment and labour law practice handles these claims at the demand, claims authority and suit stages, and the wider picture of the four codes is in our note on what actually changed for employees.

Frequently Asked Questions

This article is for general informational purposes only and does not constitute legal advice. Consult a qualified advocate for advice on your specific situation.

Related Guides

Settlement claims sit at the meeting point of the firm's employment and labour law practice and its civil litigation practice, which takes the contractual balance to suit.

• Gratuity Under the Code on Social Security: What Changed
• Wrongful Termination in India: Employee Rights and Remedies (2026)
• Asked to Resign? When a Resignation Is Really a Termination