India Offboarding & Termination Planner
India has no at-will employment. A termination here is a project, not a message — the lawful ground, the notice, the payouts and the documents are planned before the conversation. Tell us the situation and we’ll map the compliant path, the statutory deadlines, and where you’re exposed.
This is a planner, not a severance calculator. For the precise rupee number, use Wisemonk’s severance pay calculator & gratuity calculator.
The situation
Six inputs. The first two decide almost everything.
Leave blank for 50% of gross.
Triggers Chapter X — 3-month notice plus prior government permission.
Status: “Worker”
Elevated risk
The ground is clean, but skipping the notice-reasons, LIFO, government notice or the re-skilling fund exposes you to a reinstatement claim (workers have wide remedies).
Who is in charge of this exit
Individual contributor / technician / operator — a “worker” under s.2(zr) regardless of pay.
Because this person is a worker, the Industrial Relations Code applies on top of the contract and the state Act — and workers have wide remedies, including reinstatement.
The lawful path for this exit
Retrenchment / redundancy (employer-initiated, non-punitive) For a worker, redundancy is retrenchment under s.2(zh) — the statutory machinery applies in full.
- Serve 1 month written notice stating the reasons for retrenchment, or pay wages in lieu (s.70(a)).
- Pay retrenchment compensation: 15 days average pay per completed year, part over 6 months counted as a full year (s.70(b)).
- Contribute a further 15 days last-drawn wages to the worker re-skilling fund within 45 days (s.83) — ON TOP of s.70(b).
- Apply last-in-first-out for the role unless you record reasons to depart from it (s.71).
- Serve notice on the appropriate government in the prescribed manner (s.70(c)).
- Run F&F within 2 working days; pay gratuity within 30 days; issue the exit documents.
Compliance timeline & statutory deadlines
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Plan before the conversation
Ground, notice, payouts and documents are decided first. In India the settlement is built before the last working day.
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Notice served / paid in lieu
Served (worked) — 30
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Full & final settlement — wage components
Within 2 working days of the last working day (s.17(2) Code on Wages). The old 30–45 day practice is now non-compliant.
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Re-skilling fund contribution
Within 45 days — 15 days last-drawn wages credited to the worker (s.83).
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Documents issued
Relieving letter, experience certificate, F&F statement, final payslip, PF & gratuity paperwork, tax docs.
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PF settlement / transfer
Employee-initiated through EPFO — runs on EPFO timelines (~15–20 working days), separate from your F&F.
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What the exit costs (estimate)
No statutory payout lines are triggered by these inputs beyond earned salary — but you still owe earned wages and any accrued leave, settled within 2 working days.
| Component | Basis | Amount |
|---|---|---|
| Leave encashment state Act / policy | 12 days at (basic+DA)/26 | ₹27,692 |
| Retrenchment compensation s.70(b) IR Code | avg pay × 15/26 × 4 yrs | ₹2,76,923 |
| Re-skilling fund contribution s.83 IR Code | 15 days last-drawn wages, one-time | ₹69,231 |
| Estimated exit cost | ≈ $3,919 at ₹95.4/USD | ₹3,73,846 |
Excludes unpaid salary through the last day, pro-rata statutory bonus (wages ≤ ₹21,000/mo), reimbursements and any ex-gratia; and is net of deductions (notice shortfall, unrecovered advances, unreturned assets, TDS). Basic+DA assumed at 50% of gross.
For the exact figure, use the severance pay calculator and gratuity calculator calculators.
Documents you must issue
- Termination / relieving letter — ends the relationship on the record; for a retrenchment it must state the reasons. Keep it factual; anything here can be read back in a tribunal.
- Experience / service certificate — confirms tenure and last role held.
- Full & final settlement statement — itemises everything paid and deducted; hand over one signed statement.
- Final payslip, PF & gratuity paperwork, tax documents (Form 16).
- Asset recovery runs in parallel (laptop, monitors, access) — do not hold the settlement hostage to it.
Where you’re exposed
- India has no at-will employment — every exit needs a lawful ground, a notice period and a paper trail. A US-style “effective today” message is not a ground.
- The 2 working day F&F deadline is the most commonly missed one — a next-payroll-cycle process cannot meet it. Build the settlement before the last day.
- Karnataka: Removal only for reasonable cause (s.39, 1961 Act); the employee may appeal within 30 days. Notice alone does not make the exit safe.
- This person is a worker — remedies are wide and reinstatement is a live outcome if the process is skipped.
- The re-skilling fund (s.83) is the single most commonly missed line in a foreign employer’s first India exit budget.
- You cannot terminate during maternity leave (s.62), including where a notice period would expire during that leave.
Wisemonk runs compliant India exits end-to-end
As your Employer of Record, Wisemonk handles the notice, the 2-day settlement, the statutory payouts and every exit document — so the exit closes clean instead of becoming a claim.
Sources (verified Aug 2026)
- Industrial Relations Code 2020 (worker s.2(zr); retrenchment s.70; LIFO s.71; re-hire s.72; inquiry s.38; re-skilling fund s.83; Chapter X s.77/s.79). Code on Social Security 2020 (gratuity s.53; maternity s.62). Code on Wages 2019 (final wages s.17(2)). State Shops & Establishments Acts: Karnataka s.39 (1961), Delhi s.30 (1954), Tamil Nadu s.41 (1947), Telangana s.47 (1988), Maharashtra 2017 Act. All four Labour Codes in force since 21 Nov 2025; Central Rules notified 8–9 May 2026; most state rules still rolling out.
- Cost figures are an estimate to size the exit — not legal advice, and not a substitute for state-specific counsel. Central Rules bind only where the central government is the “appropriate government”; a typical foreign company’s India office follows its state rules.
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