Gratuity New Rules: There is going to be a big change in the new Labor Codes regarding Gratuity received by the employees. Under the new rules, the requirement of service for gratuity will be reduced from 5 years to 1 year. Let’s know about it in detail.
For labor reform in the country, the central government may soon implement 4 new labor codes. Minister of State for Labor Rameshwar Teli has given written information regarding this in the Lok Sabha. After the implementation of the new labor codes, there will be a change in the salary, leave, provident fund and gratuity of the employees.
There will be no compulsion of 5 years continuous job in any institution for government gratuity. However, there has not been a formal announcement on this from the government yet. But, it will come into effect as soon as the new labor law comes into force.
How much gratuity is received?
As of now, according to the rule regarding gratuity, gratuity is made on completion of 5 years in any institution. On completion of 5 years, the calculation of gratuity is done on the basis of your salary in the month on which you leave the company. For example, A worked in a company for 10 years. In the last month, 50 thousand rupees come in A’s account. In that his basic salary is 20 thousand rupees. 6 thousand rupees is his dearness allowance.
Gratuity will be calculated on the basis of 26 thousand (Basic and Dearness Allowance). Working days are considered 26 in gratuity. Now divide 26 thousand by 26. The result came out to be 1000 rupees. Now it has to be multiplied by 15 days because it is added according to 15 days in a year. The result will be 15000. If he worked for 5 years, he would get a total of Rs 75,000 as gratuity.
Gratuity is mentioned in the social security bill
In Chapter 5 of the Social Security Bill, 2020, information about the rule of gratuity has been given. Apart from salary, pension and provident fund, gratuity is also given to the employees working in the same company for a long time. Gratuity is the reward an employee receives from the company. If the employee fulfills certain conditions of the job, he is paid guaranteed gratuity under the prescribed formula. A small part of gratuity is deducted from the salary of the employee, but the major part is paid by the company.
Will you get gratuity even after 1 year of service?
According to the information given in the draft copy filed in the Lok Sabha, if any employee works for one year at any place, he will be entitled to gratuity. The government has made this arrangement for fixed term employees ie those working on contract. Even if a person works for a fixed period of one year on a contract with a company, he will get gratuity. The employee working on contract is now being given the right to social security like a regular employee. Apart from contract employees, those working in seasonal establishments will also get the benefit of this.
Who will get benefit from Gratuity Act 2020?
Only fixed term employees will get the benefit of Gratuity Act 2020. For others also the old rule will continue. At present, gratuity is fixed on the basis of 15 days salary every year on completion of five years of service. Gratuity is given to the employees by the company. Its maximum limit is 20 lakh rupees.
