October 28, 2020
  • October 28, 2020
Breaking News
    • Home
    • Local News
    • Employees Can Get Gratuity in 1 Year, Instead Of 5 Years As Part Of Labor Laws
    Employees-Can-Get-Gratuity-in-1-Year

    Employees Can Get Gratuity in 1 Year, Instead Of 5 Years As Part Of Labor Laws

    By on August 18, 2020 24 40416 Views

    The central government has agreed to change the eligibility criteria for employees to get gratuity. Earlier, an employee had to complete at least 5 years of service in order to get gratuity from a company. This time period has reduced down to only one year. But, not everyone is eligible to get this gratuity. Read on to know!

    What is Gratuity?

    Before going to eligibility and changes, let’s have a quick look at what is gratuity and what are its benefits.

    Gratuity is an amount given by a company to its employee for the services he or she provided. Usually, gratuity is given at the time of retirement, but it can be given in other cases like resignation or sudden death of the employee.

    Source

    Changes In Labor Laws

    After a recommendation by a high-level Parliamentary Committee on Labour, the central government has agreed to reduce the minimum amount of service required to one year.

    The report of the committee quoted a labor secretary saying, “As it is fixed-term employment, it is coming in a big way. We want the workers to get the gratuity also. So one year will be more appropriate.”

    Also Read: Explainer: What Are Labour Laws, And Why Are States Changing Them?

    Eligibility Criteria:

    The catch to notice in the changes is that it is not applied to all types of employees. For now, the government has only made ‘gratuity for one year’ mandatory only for employees who are on a fixed-term contract and their employment period ends when the contract ends.

    Source

    However, the committee suggested to the government that all types of employees should be covered, saying, “Such provision be extended to all kinds of employees including contract labours, seasonal workers, piece rate workers and fixed-term employees and daily/monthly wage workers.”

    Trade unions are demanding that the government should also include contract laborers, seasonal workers, daily-wage workers, etc.

    With the ongoing pandemic, gig economy is also thriving and is expected to rise on steeper curve in the near future. In such case, there are high chances that more voices will rise to make the labor laws to be more inclusive.

    This news piece will be updated as soon as the government makes any new changes in the labor laws.

    If you liked what you read, subscribe to our email list to get regular updates of news direct in your mail-box. Keep reading NewzOnTips.

    24 Comments
    • K.Shridhar Rao 2 months ago

      Kindly provide information as to how to calculate Gratuity.Is there any lower/upper limit of ones salary to be eligible to gratuity or all irrespective of salary limit are eligible as per existing Gratuity Act.?ThanQ

    • Jeevakumar R 2 months ago

      Very nice & usefull to employees

    • Send me emails

    • PRAMOD KUMAR 2 months ago

      Is there any change in amount to be payable for each completed years.

    • Jagdish 2 months ago

      OK

    • Syam Kumar Pitta 2 months ago

      It is very useful to me

    • M M Gupta 2 months ago

      It will be a great benefit which is not available to th

    • Hemant Jaiswal 2 months ago

      Whether contract labour is eligible to get gratuity

    • Deepa 2 months ago

      1 year is too short a period as the employers take time in training such employees and 1 year will be a great risk for the employer for the investment made on the resource.
      So it will definitely give scope for the employees to shift jobs easily every year.
      In the current circumstances where businesses have shrieked it will be an additional burden where the companies have to suffer.

      • Prakash 2 months ago

        Madam
        Kimdly think of common people, 5 yrs is too long under present situations

    • sushanta ganguly 2 months ago

      I really like to get this mail

    • This is good initiative by government. I request F.M to work out for we hoteliers who have lost job and finding it very difficult to manage family and bank commitment.

    • Srinivas 2 months ago

      Helpful information

    • Ani Parikh 2 months ago

      It should be covered all types of employees

    • Knnk 2 months ago

      This law should be effective since the announcement of pandemic as majority of them have lost jobs during this period

    • Sachin Deshpande 2 months ago

      It should applicable to all as employers consider it as part of CTC and if employee leave company before 5 yes it’s not paid Which is not correct

      • Srinivasan R 2 months ago

        Yes, now salary has become CTC which is inclusive of gratuity which is being deducted. It is not paid if an employee leaves within 5 years. It should also be considered and gratuity is paid

    • Suman Kumar 2 months ago

      It would be a good decision.

    • Lakshmi B 2 months ago

      1.The employee’s productivity will be very low during the initial period up to one year.
      2. The training cost will be more for the employer.
      3. The payback period for the employer will begin after one year only.
      4.The attrition rate will increase drastically and the employer will have to suffer.
      5.Most of the employees will not be able to gain complete knowledge of the process within the short span of one year.
      6.The employer will have to concentrate more on recruiting talented skills rather than focusing and increasing production and sales.

    • Lakshmi B 2 months ago

      1.The employee’s productivity will be very low during the initial period up to one year.
      2. The training cost will be more for the employer.
      3. The payback period for the employer will begin after one year only.
      4.The attrition rate will increase drastically and the employer will have to suffer.
      5.Most of the employees will not be able to gain complete knowledge of the process within the short span of one year.
      6.The employer will have to concentrate more on recruiting talented skills rather than focusing and increasing production and sales.

    • i 2 months ago

      It’s good decision but it will be applicable to all employers and CTC employee
      who leave company before 5 fear.

    • Vishwanath B 2 months ago

      Hello Madam, I had left my job on Feb 2020 and i had for 3 years for the same company. Im i still eligible to get the Graduty from the company hence i had worked for more than 1+ year. kindly help me with this.

    • Deepak Agharkar 2 months ago

      Yes .. gratuity gets included in the CTC . Having said that , it implies that on payment or Accrual thereof it becomes a tangible liability and a Cost to Company. But some corporates don’t pay if the employee leaves within five years which is grossly incorrect . Then why call it a CTC when you are NOT paying or accruing it as a liability ? So , inclusion in CTC is a mere window dressing to make the CTC look better . But many people don’t even realise this anomaly and continue to brag about how high or good their CTC is. To my mind and to be fair to the employee , if it gets added to the CTC then even if the employee leaves in say 4 years , if not under the Payment of Gratuity Act, then a proportionate amount needs to be paid as ex-gratia at least . It’s unethical to hoodwink gullible folks like this .

    • Amit Sharma 1 month ago

      R Mam,
      This is implement in all type of Labour, One year is too short ,try to increase eligibility time duration and less also.
      Try to starting time duration 2.5 years not one year as employer side and labour its not 5 Year, this is a request , suggestions

    Leave a comment

    Your email address will not be published. Required fields are marked *