After the implementation of the new labor codes, there will be a change in the salary, leave, provident fund and gratuity of the employees. For government gratuity, there will be no compulsion to work in any institution for 5 years continuously. However, no formal announcement has been made on this by the government yet. But, it will come into force as soon as the new labor law is implemented
How much does Gratuity get?
According to the rules regarding gratuity, gratuity is made on completion of 5 years in any institution. Gratuity is calculated on the basis of your salary in that month on the day you leave the company on completion of 5 years.
For example A worked in a company for 10 years. In the last month, 50 thousand rupees comes in A’s account. In this his basic salary is 20 thousand rupees. 6 thousand rupees is his Dearness Allowance.
The calculation of gratuity will be based on 26 thousand (Basic and Dearness Allowance). Working days are considered 26 in gratuity. Now divide 26 thousand by 26. The result turned 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, then he would get a total of 75000 rupees as gratuity.
Gratuity is mentioned in the Social Security Bill
The rules of gratuity have been given in Chapter 5 of the Social Security Bill, 2020. 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 a reward given to an employee from the company. If the employee fulfills certain conditions of the job, then he is paid gratuity from the guarantee as per the prescribed formula. A small part of the gratuity is deducted from the salary of the employee, but the company pays a large part.
Gratuity will be available even on 1 year job?
According to the information given in the draft copy filed in the Lok Sabha, if any employee works for one year in any place, then he will be entitled to gratuity. The government has made this arrangement for fixed term employees i.e. those working on contract.
If a person works on a contract with a company for a fixed period of one year, he will still get gratuity. The contractual employee 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 benefit from Gratuity Act 2020?
Only fixed term employees will get the benefit of Gratuity Act 2020. The old rule will continue for others as well. 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.