Reported By:
| Edited By: DNA Web Team |Source: DNA Web Desk |Updated: Mar 29, 2022, 04:37 PM IST
The central government has made it clear that there will be no change in the gratuity norms. In Rajya Sabha, Minister of State for Labour and Employment Rameshwar Teli, in response to a question, said that employees will get gratuity equal to 15 days' salary in a year and there is no proposal to increase it to 30 days.
Another question was asked about the implementation of gratuity scheme for private and contract workers in the public sector, who have worked for less than five years.
The Union Minister replied that under the Social Security Code, 2020, in case of termination of an employee, death or disablement or termination of employment of a specified period or by such event as may be notified by the Central Government, the gratuity norms shall not require 5 years of continuous service.
Read | Here's how you can e-verify your Income Tax Return via different methods
The government reiterates that in the Code on Social Security, 2020, has been made where the employee should be considered entitled to gratuity only after working for one year. However, there is doubt on whether this law is being implemented from April 1 or not. At present, only a person who works for 4 moves and 240 days is entitled to gratuity.
It was believed that from April 1, 2022, the new labour law would be applicable, in which up to 50% of the basic salary of the employee would be deducted in PF. This will strengthen social security, but the amount of salary in hand will be reduced. However, even after its implementation, no information has been given by the government.
Gratuity is a benefit that is available under the Payment of Gratuity Act 1972. Gratuity is that part of the salary, which the company or employer gives in return for the services of the employee for years. Gratuity is given by the employer to the employee on leaving or termination of the job.
Gratuity is calculated using the formula - Year of Service x Last Salary x 15/26. For example, if an employee has worked for 20 years and his last salary was Rs 25,000, then he will get 20x25000x15/26 = Rs 2,88,461.54 as gratuity amount.
