New Delhi. A lot of relief has been given to the employees in the new Labor Code implemented by the Central Government. Under this, now in case of any employee leaving the job, resigning or being dismissed, the employer company will have to make his full payment in just two working days. Earlier there was no fixed deadline for this.

This provision has been added to the Labor Code-2019. Till now, in many companies, full and final settlement used to take 30 to 45 days. In many cases, companies used to wait for the next pay cycle. Due to this the employees had to face financial problems. Under the new rules, now the employer will have to complete the accounting of the employee within two working days.

These are included in the new rules
1. Included elements: Will include last month’s salary, outstanding leave money and other allowances which fall within the definition of ‘salary’.
2. Possible delay in these: The deadline for payment of gratuity, PF may be different, because their rules are different.

In case of retrenchment, 15 days’ skill allowance will be given separately.
The government has given big relief to the employees in the new Labor Code which came into effect from 21 November 2025. According to the new rules, laid off employees will also get a separate ‘re-skilling fund’ equivalent to 15 days’ wages along with the mandatory compensation.

This amount will be deposited directly into the employee’s bank account within 45 days of termination of employment. This amount will be given to both fixed term and permanent employees in case of termination. Experts say this provision is part of the Industrial Relations Code, 2020 and is aimed at helping employees learn new skills. This will enable employees to develop the ability to find employment again in the changing job market after losing their job.

what is the new system
The process of retrenchment i.e. termination of employment for non-disciplinary reasons has been further clarified in the new labor rules. Retrenchment means that the employee should be removed from the job without any fault or indiscipline, due to reasons like reduction in the company’s requirement or abolition of the post. This arrangement does not apply to situations in which the employee himself takes retirement.

benefits to employees
1. There will be no shortage of money while leaving the job.
2. Financial pressure will reduce before starting a new job.
3. The arbitrariness and delay of companies will be stopped.
4. The full and final process will be more transparent and faster.