Gratuity Rules: The government has made significant changes to the rules related to gratuity under the new Labour Code (Social Security Code). Previously, employees had to work for at least five years continuously to receive gratuity, but now, under certain circumstances, gratuity can be earned even after completing just one year of service. This change brings relief, especially for new employees and fixed-term employees. Furthermore, certain conditions have been established, failure to comply with which will result in not receiving even a single rupee at the time of gratuity.
These conditions must be followed
Under the new rules, employees will no longer have to wait for years, but this benefit is not completely unconditional. If an employee does not follow the company’s rules or code of conduct, their gratuity may be withheld.
If allegations of violence, misconduct, sexual harassment, or indiscipline are proven against an employee, the company reserves the right to withhold all or part of their gratuity. Furthermore, if an employee’s negligence or deliberate mistake causes financial loss to the company, the company can compensate for that loss with gratuity. Accepting a bribe, cheating, or committing any kind of fraud are also serious reasons for which the company can withhold gratuity without any restrictions.
It’s also important to note that gratuity doesn’t apply to every company. The Payment of Gratuity Act applies only to organisations with at least 10 employees. If your company doesn’t fall under this scope, you can’t make a legal claim for gratuity.
Gratuity is a statutory retirement benefit awarded in recognition of an employee’s long and continuous service. It’s calculated based on the employee’s last basic salary and dearness allowance (DA). Currently, the maximum limit for gratuity is ₹20 lakh, which may be revised by the government from time to time.
To protect their gratuity, employees must follow company rules, avoid indiscipline, work honestly, and refrain from any activities that could harm the company. Gratuity may be received sooner under the new system, but ignoring the rules will result in losing a single rupee.