Gratuity New Rules: There is going to be a big change in the new labor code regarding the gratuity received by the employees. Under the new rules, the service requirement for gratuity will be reduced from 5 years to 1 year. Let us 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 in this regard in the Lok Sabha. After the implementation of the new labor code, there will be a change in the salary, leave, provident fund and gratuity of the employees.
There will be no compulsion to work continuously for 5 years in any institution for government gratuity. However, there is no formal announcement on this from the government yet. But, it will come into force as soon as the new labor law comes into force.
How much gratuity is received?
As of now, according to the rule related to gratuity, gratuity is given on completion of 5 years in any institution. Gratuity is calculated on the basis of your salary in the month in which you leave the company after completion of 5 years. For example, A worked in a company for 10 years. 50 thousand rupees came in A’s account in the last month. In that, his basic salary is 20 thousand rupees. 6 thousand is his dearness allowance.
Gratuity will be calculated on the basis of 26 thousand (Basic and Dearness Allowance). 26 working days are considered in Gratuity. Now divide 26 thousand by 26. The result came out to be Rs.1000. Now it has to be multiplied by 15 days because 15 days are added in a year. The result will be 15000. If he works for 5 years, he will get a total of Rs 75,000 as gratuity.
Gratuity is mentioned in the social security bill
Chapter 5 of the Social Security Bill, 2020 gives information about the rule of gratuity. Apart from salary, pension and provident fund, gratuity is also given to the employees working for a long time in the same company. Gratuity is the reward that an employee receives from the company. If the employee fulfills certain conditions of the job, he is paid guaranteed gratuity under a prescribed formula. A small portion of gratuity is deducted from the salary of the employee, but the major portion is paid by the company.
Will gratuity be given even after 1 year of service?
According to the information given in the draft copy filed in the Lok Sabha, if an employee works at any place for one year, then 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 contractual employee is now being given the right of social security like a regular employee. Apart from contract employees, those working in seasonal establishments will also get its benefit.
Who will get benefit from Gratuity Act 2020?
The benefit of Gratuity Act 2020 will be given only to the fixed term employees. For others also the old rule will continue. At present, gratuity is fixed on the basis of 15 days salary every year after completion of five years of service. Gratuity is given to the employees by the company. Its maximum limit is 20 lakh rupees.
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