New Changes in Gratuity Rules: Gratuity is a form of giving thanks by employers for long-term service. Previously, gratuity was provided after 5 years of continuous service. Now, the High Court has accepted major changes in the rule. Now there is a greater benefit to the employee. The amount of gratuity has been increased, and the rules are now more employee-friendly.
These changes are significant for employee rights and security. The new government rule now reduces the eligibility time, increases the maximum limit and makes the payment of gratuity quicker and easier.
Key Takeaways
Quick Read- Now gratuity will be available after 3 years of service rather than 5 years.
- The maximum gratuity limit has been increased from ₹20 lath to ₹30 lath.
- Contract and gig workers will now be entitled to gratuity.
- Payment will now have to be paid within 30 days, rather than 60 days.
Significant Changes In Gratuity Rules
- Now gratuity will be available after 3 years of service rather than 5 years.
- The maximum gratuity limit has been increased from ₹20 lath to ₹30 lath.
- Contract and gig workers will now be entitled to gratuity.
- Payment will now have to be paid within 30 days, rather than 60 days.
- If payment is not made within the fixed time then ₹50,000 + ₹1,000 will be payable per day of default will be assessed.
- If payment is not made within 30 days, employee will be liable for interest.
- Now workers will be able to apply for gratuity through a digital application form. No more heavy paperwork.
Summary of New Rules
Subject Old Rule New Rule
Summary of New Rules
| Subject | Old Rule | New Rule |
|---|---|---|
| Service Time | 5 years | 3 years |
| Max Gratuity | ₹20 lakh | ₹30 lakh |
| Who Gets | Only regular workers | Regular, Contract, Gig workers |
| Payment Time | 60 days | 30 days |
| Fine for Delay | Very less | ₹50,000 + ₹1,000/day |
| Interest | No | Yes |
| Apply | Paper | Online |
Who Will Get Gratuity?
- Must work 3 years without break
- Must work in a company under the Gratuity Act
- Job must end because of resignation, retirement, disability or death
- Contract and gig workers must show work record
Benefits for Employees
- More money and security
- Gratuity even after 3 years of job
- Faster payment to employees
- Law will protect employee rights
- Online system makes it easy and fast
Gratuity Formula (Very Simple)
Gratuity = (Last Salary × 15 × Years of Service) ÷ 26