How to enable notice period buyout in the Full and Final (FnF) settlement

Notice period buyout

As per organizational rules, if an employee wants to leave their job, they have to tender their resignation and serve a notice period. The notice period is typically of 30 to 90 days. If any employee wants to leave their job earlier than the required notice period, they can opt for a notice period buyout. This is a process wherein the employer agrees to waive or shorten the required notice period for the employee's resignation or termination, in exchange for payment or compensation from the employee. The payment amount is determined based on the employee's salary, position and the remaining days of the notice period. 

The notice period buyout is usually negotiated and included in the employment agreement or contract. Sometimes, when the employee chooses to join a new organization, the notice period buyout amount is reimbursed by the new employer.

How to enable notice period buyout in the FnF settlement

Click on the Org (1) tab and then on Exits (2). Open In Exit Process (3) tab and find the employee for whom you want to enable the notice period buyout. Click on the 3 dots under Actions. From among the options that pop up, click on Process & Settle (4). 

On the Exit Process page that opens next, proceed to step 4 (Dues & Overrides). Under Notice Period Buyout, choose Yes (1) to the question: 'Do you want employee to buyout the remaining notice period days?'

Use the drop-down to choose your Buyout Policy (2).  Now, based on the formula given in the policy, the system will automatically calculate the notice period buyout amount. 

In the section below, you can also manually enter the number of days and also the total amount (3).

Click Save & Continue (4) and proceed to Finalize. 

You may also like to read the article on Where to add the notice period buyout formula?

If you have any more questions, please refer to the other FAQ articles. If need be, contact our product experts!