New Delhi. An important change has come to the labor rules for the working people of India. For a long time, 5 years of service was mandatory to get gratuity, but now some employees will be able to get this benefit even before that. This change comes after the implementation of new labor laws, which aim to provide better social security to employees.
These new provisions are considered to be applicable from November 2025. Its benefit will be available to those employees who have been appointed after this period and are working on fixed-term or contract basis. However, for employees who are permanent, the 5 year condition is still applicable.
What has changed in the rules?
Earlier, to get gratuity, it was necessary for any employee to work in the same organization for at least 5 years. But under the new rules, fixed-term and contract employees have got big relief. Now these employees can become eligible for gratuity only after 1 year of continuous service.
Gratuity amount also increased
The impact of the new rules is not limited only to eligibility, but will also affect the amount of gratuity. Now it has been made mandatory for companies that the employee’s ‘wages’ (salary) should be at least 50% of his total CTC.
How will fixed-term employees get the benefit?
Fixed-term employees are those whom the company employs on a contract basis for a fixed period of time. Such employees will now get pro-rata (proportional) gratuity according to their service period. That is, if someone has worked for 1 year, he will get the share of gratuity according to the same period.
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