Gratuity: After the implementation of the new labor code, there will be a big increase in the gratuity of fixed term employees. Earlier the rule was that only the employees above 5 years got the benefit of gratuity. But after the proposed changes in the new social security code are implemented, it will be applicable for fixed term employees as well.
The new labor code issued by the Union Labor Ministry is going to be implemented soon. This will change the entire salary of the employees. The salary in hand will decrease somewhat but the amount deposited in retirement fund like PF will increase. With this, the gratuity received by the employees will also increase. Under the new labor code, the allowance given by the companies cannot exceed 50% of the basic salary. This was not happening till now. Now there will be a change in the entire salary due to which the basic payment will increase. An increase in the basic payment will increase the gratuity of the employees as it is determined from the basic salary.
The gratuity of the employees will increase but the formula for its calculation will remain the same. It will be calculated according to the Code of Social Security, 2020. Gratuity is given to the employees under the Payment of Gratuity Act, 1972. According to this rule, the wage of 15 days is seen in which the old salary is also multiplied. Its formula is 15 times previous salary times working period part 26. How much gratuity an employee will get depends on two things. First, last salary and second, how many years have you worked.
What is the rule
Now it has to be seen whether the company in which you work comes under the purview of gratuity law or not. If your company comes under this law, then after the implementation of the new labor code, there will be a change in the basic payment, due to which your gratuity will also increase. You can also know how much amount you will get as gratuity. Gratuity is always calculated from the previous salary. Suppose your previous salary is 50 thousand rupees per month and you have worked in a company for 15 years 9 months. There is a rule to count 16 years in Lamsam for 15 years and 9 months.
How to calculate gratuity
Accordingly, your gratuity will be 15 x 50,000 x 16 divided by 26- 4.61 thousand. Previous salary means basic salary and dearness allowance. Here 26 means 26 days of the month. There are 4 Sundays in 30 days, so only 26 working days are counted. After the implementation of the new labor code, there will be a change in the basic salary, so your gratuity will also change. Basic pay will be increased, so your gratuity will also increase.
Now the rule of 5 years is over
After the implementation of the new labor code, there will be a big increase in the gratuity of fixed term employees. Earlier the rule was that only the employees above 5 years got the benefit of gratuity. But after the proposed changes in the new social security code are implemented, it will be applicable for fixed term employees as well. In this situation, it will not be seen how many years the employee has worked in a company. If a fixed term employee has been in the job for less than 5 years, then the company will have to pay the benefit of gratuity to him. Companies cannot deny the benefit of gratuity by following the 5-year rule. Employees working for more days and years will benefit more because gratuity is also calculated accordingly.
