TL;DR, this chapter is relevant only for those already working in the industry and planning their exit to pursue higher studies. Moreover, if you have already hopped companies before, then you might know a lot of this stuff already. So, if this ain’t you, then go out and touch some grass or move to another chapter. Your call.
So, now you are in the last leg of the process but still have an office to show up to the next day. You probably kept a poker face and haven’t broken this news yet. Well, depending on the state of your relationship with upper management, you did make the right call. But this hide-and-seek won’t last long, and you need to plan the big reveal someday.
You’ll be wondering when that should be. What will be your next steps for a smooth exit? What all should you be worried about? Worry not, I’ll address some of those things here.
Let’s start with declaring your Last Working Date (LWD). For this, first figure out your firm’s notice period policy. Is it one month, two months, or an eternity? Or are you working with angels who will show you the door the very next day?
Now, the usual policy that Indian companies follow is that a person on probation can part ways either right away or, at most, within one month. For Full-Time Employees (FTEs), it usually varies between one and three months. So, as soon as you get your visa-stamped passport back, do the calculation and decide accordingly on which date you’ll drop the resignation email or ring the Workday portal.
Some firms might be willing to hand you an “early exit”, i.e., cut short your notice period, either as a gesture of goodwill or against a monetary notice period buyback. This buyback amount can be just your basic pay or can also include the allowances component of your salary. But how do you get clarity on this?
In an extremely rare case, your manager or colleagues might already know that you were applying and might be open to this discussion. But most likely, you’ll be hesitant to give even the slightest hint of your next move to anyone at work, so that route is closed. Hence, refer to the HR policy documents or your offer letter, since this clause might be mentioned somewhere there. The best way is to find someone who recently moved out of your team or office and get clarity on it well in advance. Though, if you can afford to buy your exit, then don’t even bother. What are a few thousand rupees compared to the lakhs that you’ve already bet on the game?
Moreover, you need to get clearances from every department, such as Finance, IT, and HR, to initiate your Full and Final Settlement (FnF) and obtain your relieving letter (it’s time to finally say goodbye to the company laptop, buddy). Based on your years of service, you might also need to pay back sign-on, relocation, or other one-time bonuses (known as a Clawback clause). Read your offer letter thoroughly to understand your legal and financial obligations.
Once you have cleared all dues by your LWD, your FnF statement, containing information on your final pay, leave encashment, taxation, etc., will be sent to you within a couple of weeks. By the way, your last salary payment will likely be withheld until this statement has been generated, so it might be a good time to revisit your autopay mandates on UPI apps.
Final word of caution: Don’t rely on your manager’s word on anything. HR has the final say.
Let’s say that you are currently on probation, which might officially end later than your expected resignation date. Even though your manager might email you confirming your FTE status much earlier than this official date, and you may be tempted to make plans based on that approval, just stop right there and stick to the date that HR quotes. You don’t want to be made a sacrificial goat because of such policy grey areas. After all, your supervisor is also just an employee like you, and the final decision-making lies in management’s hands.
Also, make sure you keep the relieving letter or character certificate with you. Even if you join a company abroad, the ghost of your Indian work experience will follow you there. End your time here on a good note, as you never know when your paths might cross again. Moreover, someday you might need to knock on their door again for a letter of recommendation, so never burn bridges.
Now, based on the annual or paid leaves that you accumulated over the course of your service, you’ll receive an equivalent amount in your bank account, either with the FnF amount or in the next month’s payment cycle. Usually, it is calculated using the following formula: basic pay per day × number of unused paid leaves (Have you exhausted your annual or paid leaves instead of your casual or sick leaves? Oh, my sweet summer child). Again, check the policy documents or reach out to the payroll team to see whether they are generous enough in this regard to include the allowances component as well.
Also, if you have a year-end bonus that you were expecting to receive during your notice period or even after leaving the firm, then be sure to check its status with HR. You might receive it in full or at least on a prorated basis. Usually, the decision on bonus or variable pay is made by the end of the calendar year, i.e., December of current year, rather than the end of the financial year, i.e., March of upcoming year, so you might still be eligible. However, it will typically be credited through the usual payment cycle, so you might need to wait until that month. After all, there is no harm in asking, and I’m sure you don’t mind money hitting your bank account, do you?
Coming to a component of your compensation, i.e., either Restricted Stock Units (RSUs) or an Employee Stock Option Plan (ESOP). As a rule of thumb, you receive RSUs in large publicly listed companies, while ESOPs are mostly offered by early-stage startups. Now, all your vested RSUs are already your property, so you don’t need to worry about losing them. Just keep the login credentials for the platform (say, E*TRADE) that manages your stocks so that you can eventually sell them. Also, make sure that you have filled out your W-8BEN form diligently for stocks issued by a US-based employer to avoid unnecessary tax complications and potential double taxation in India and the US.
ESOPs are much more complicated than RSUs since you don’t own anything unless you exercise your right to the underlying shares. All your vested ESOPs remain available to you until the exercise window specified by your company expires. Within this post-termination period, you can still pay the exercise fee out of your own pocket and obtain the shares. However, if the startup has yet to see the light of an Initial Public Offering (IPO) or be acquired by a bigger fish, then all of this can feel like exchanging real money for paper money. So, make the call based on your expectations of the company’s growth, or pray that they announce a buyback before turning into the next BYJU’S.
Now, if you were truly a loyalist to your current firm and are parting ways after completing more than five years of service, well, first of all, congratulations! Glad to see that you sailed through this economy for so long. You should now be entitled to receive a gratuity payment. Do check how it is calculated at your firm, since there is no one-size-fits-all formula. Also, the minimum service requirement can sometimes be interpreted as something like four years plus X days, so you may want to keep that in mind while planning your LWD as well.
But most likely, the amount you receive will be quite small, so ask yourself: was it really worth putting in that much effort? The good part is that a gratuity amount of up to INR 20 lakhs is currently tax-exempt (Don’t let our beloved Finance Minister know this). So, make the best use of this virgin money.