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Employment & salary

Full-and-final settlement or relieving letter withheld

The Code on Wages, 2019 requires wages due on exit to be paid within two working days. Here's what the law says about final dues, relieving letters and where claims go.

Reviewed by Naveen & AnjaliUpdated 6 min readRules vary by state ↓

In short

  • Since 21 November 2025, the Code on Wages, 2019 requires wages due to an employee who resigns, is removed, dismissed or retrenched, or loses their job because the establishment closed, to be paid within two working days.
  • Not everything in a "full-and-final" statement is "wages". Gratuity, for example, has its own 30-day rule under the Code on Social Security, 2020.
  • Indian law has no general rule that names a "relieving letter". Your contract, company policy and, for some workplaces, standing orders decide what document you get and when.
  • Unpaid final wages can be claimed before the authority appointed under the Code on Wages, generally within three years.

Reviewed by 2 advocates · 2 Bar Councils

  • Approved ·

    Practises property and succession law

    Reviewed this guide for accuracy against the sources listed below.

02What the law says

Section 17(2) of the Code on Wages, 2019 says that where an employee has been removed or dismissed, retrenched, has resigned, or became unemployed because the establishment closed, the wages payable must be paid within two working days of the removal, dismissal, retrenchment or resignation. The Code defines "employee" widely. Whether a particular senior or managerial role is covered can be checked with an advocate.

The two-day rule applies to "wages" as the Code defines them. Some items in a full-and-final settlement, such as gratuity, fall outside that definition and have their own timelines. Whether items like leave encashment or a contractual bonus count as wages for this purpose depends on the facts and how the Code's definition applies. This is still being argued.

A "relieving letter" or "experience letter" is mostly a matter of contract and company policy. For some establishments, standing orders under the Industrial Relations Code, 2020 may require the employer to give a service certificate when employment ends. Whether they apply depends on the size and type of the establishment and on whether the person is a "worker" under that Code. Disputes over notice periods, notice pay or recovery of company property often explain why an employer holds back a letter. Whether holding it back is lawful depends on the contract and the facts.

The authority that hears wage claims is appointed by the "appropriate government", so the office and procedure differ from state to state.

Your state

State-specific notes for this guide are coming soon. Rules differ by state, so check with your state's official authority.

03Where you can go

  1. HR or management, in writing. A written request for an itemised full-and-final statement, the payment date, and the relieving or service document creates a record.
  2. Labour department. A claim for unpaid final wages can be filed with the authority under the Code on Wages. The state government appoints authorities for most private employers. The central government appoints them for central-sphere establishments.
  3. Labour department or conciliation officer about a service certificate or a dispute under standing orders, for "workers" in covered establishments.
  4. EPFO grievance portal (epfigms.gov.in (opens in new tab)) if PF shown on your payslips wasn't deposited.
  5. Civil court. Some employees, especially in senior roles, sue for dues or for a document under the contract.

04How it usually works

  1. 01

    Employees usually keep proof of their last working day: the resignation acceptance, handover emails and the asset-return receipt.

  2. 02

    They ask in writing for the final settlement statement and the relieving or service document, and note the date.

  3. 03

    If wages aren't paid within two working days of separation, many employees send a written reminder setting out the amount.

  4. 04

    If it is still unpaid, a claim can be filed with the authority under the Code on Wages, which hears both sides and can order payment.

  5. 05

    Gratuity and PF are claimed through their own processes. See the related guides.

05Time limits

  • Two working days: for wages due on resignation, removal, dismissal, retrenchment or closure (Section 17(2)).
  • 30 days: for gratuity, under the Code on Social Security, 2020.
  • Three years: to file a wages claim under Section 45 of the Code on Wages. A later claim can be accepted if there was sufficient cause.

06Documents to gather

  • Offer letter, appointment letter and employment contract, including the notice-period clause
  • Resignation letter and acceptance, or the termination letter
  • Last payslips and bank statements
  • Full-and-final settlement statement, if one was given
  • Handover, exit-interview and asset-return emails or receipts
  • Emails and messages asking for dues or the relieving letter

07Common questions

The Code says wages due on separation must be paid within two working days. It also lets the appropriate government set a different time limit in some circumstances. A company policy by itself doesn't override the Code, but which items count as "wages" can be disputed.

This is a common dispute. Your contract usually says what happens if notice isn't served, for example paying notice pay. Whether withholding the letter is lawful depends on the contract, any standing orders that apply, and the facts.

No. Gratuity is governed by the Code on Social Security, 2020, which gives the employer 30 days from when it becomes payable.

The Code on Wages allows only certain authorised deductions. Whether a notice-pay recovery is allowed depends on your contract and how it is made.

08Questions to ask an advocate

If you speak to an advocate, these questions can help make the conversation useful.

  • Which items in my final settlement count as "wages" under the two-day rule?
  • Am I a "worker" covered by standing orders, and does my employer have to give me a service certificate?
  • Should I file a claim under the Code on Wages, raise an industrial dispute, or file a civil suit?
  • Can my employer lawfully hold back my relieving letter for a notice-period or asset dispute?

09Sources

Related guides

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This guide is general legal information for India, not legal advice. Laws and procedures change and can differ by state. For advice on your situation, speak to a qualified advocate.

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