Business Desk. Now the rules related to gratuity can be changed. Right now, working in any company for at least 5 years gives the benefit of gratuity with salary, but the Central Government has introduced three bills related to labor reforms in Lok Sabha (Lok Sabha) in the monsoon session of Parliament. Several new provisions have been added to the Social Security Code (Code on Social Security, 2020). There is also a provision for gratuity in this. It says that gratuity can be found in 1 year instead of 5 years.
What are Labor Reforms Bill The
three bills related to Labor Reforms introduced in Lok Sabha include Occupational Safety, Health and Working Condition Code 2020, Industrial These include the Industrial Relations Code 2020 and the Social Security Code 2020. One provision in the Social Security Code is about gratuity. It says that gratuity can be found in 1 year instead of 5 years.
Those who work on contract basis are also benefited
in the new provisions of the Social Security Code 2020 that people who get jobs on fixed term basis will get gratuity on the same day basis. For this, 5 years will not be required. This clearly indicates that those working on contract basis will get the benefit of gratuity along with their salary, irrespective of the duration of the contract.
The bill is yet to be passed, the
Social Security Code 2020 (Social Security Code 2020) bill will have to be passed in both the houses after it is introduced in Parliament. Only then will this law be made. Information about all its rules will be available only after the passage of the bill.
What happens: Gratuity
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 the reward received by an employee from the company. Gratuity is guaranteed under a prescribed formula if the employee fulfills certain conditions of the job. A small portion of gratuity is deducted from the salary of the employee, while the major portion is paid by the company. Currently, if a person works in a company for at least 5 years, then he is entitled to gratuity.
Under the Payment of Gratuity Act, 1972, the Payment of Gratuity Act, 1972, it benefits every employee of an institution where more than 10 employees work. If the employee changes the job, retires or leaves the job due to any reason, but he meets the rules of gratuity, he gets the benefit of gratuity.
How the amount is fixed? The
gratuity is a fixed formula. Gratuity is calculated as follows – Total gratuity amount (final salary) x (15/26) x (how many years worked in the company). If an employee has worked in the same company for 20 years and his final salary is 75000 rupees (including basic salary and dearness allowance), then only 26 days a month are counted here. This is because there are 4 days off. At the same time, gratuity is calculated on the basis of 15 days in a year.
be the total amount of gratuity will be (75000) x (15/26) x (20) 865385 after the final salary is Rs 75000 (including basic salary and dearness allowance). This amount will be paid to the employee.