Gratuity New Rules: The Government of India is preparing to bring a new labor code in the country soon. If the new labor code is implemented, then major changes can be made in the rules of many things like leave, salary, provident fund etc. to the employees. It is worth noting that in order to get gratuity, it is necessary for the employees to work continuously for at least 5 years, but if this labor code is implemented, then now after working only 1 year, you will get the benefit of gratuity facility.
Gratuity rules may change
Let us tell you that after the implementation of the new labor code, the amount of retirement fund to the employees may increase. Along with this, the amount of gratuity to the employees will also increase. According to the rules of the Payment of Gratuity Act 1972, which is currently applicable to all employees, if more than 10 employees in a company do tax, then the company gives the benefit of gratuity to the people who have worked for 5 consecutive years.
But now the government is planning to change the rules and now even after working continuously for only one year, the contract based employees will start getting the benefit of gratuity. Keep in mind that this rule will be applicable only for contract based employees. At the same time, the limit of gratuity for permanent employees will be 5 years. The government is trying to ease the rules for contract based workers.
Know what is Gratuity?
A part of the salary of every employee is deducted for gratuity and Employees Provident Fund Organization. For gratuity, a small part has to be given to the employee and a large part to the employer. When the employee works in a company continuously for 5 years, then he becomes entitled to take this gratuity. When the employee retires or leaves the company, then this gratuity money has to be given to the employee of the company.
This is how gratuity is calculated-
Its calculation is done on the formula last salary × (15/26) × how much work has been done in the company. For example, if you have worked in a company for 20 years and your last salary is Rs 75,000, then your gratuity will be calculated accordingly. Gratuity = (75000) x (20) x (15/26) at 8,65,385 Will get Rs. The company will give this amount to you on retirement or after leaving the job. It is worth noting that the company does not give gratuity amount more than Rs 20 lakh.
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