Report Wire - Gratuity cost is efficient after 5 years of service

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Gratuity cost is efficient after 5 years of service

2 min read
The Payment of Gratuity Act, 1972, was enacted to provide for gratuity payment to employees engaged in factories, mines, oilfields, plantations, ports, railway companies, shops or other establishments. (Photo: Mint)

I labored for an organization for 4 years and 4 months. Can you please affirm whether or not I’m eligible for gratuity cost or not. Can you additionally share the brand new round on gratuity eligibility and the method to assert it – Avik Mitra

Answer by Jay Jhaveri, associate at Bhuta Shah & Co.

As per present provisions, gratuity cost is efficient after completion of 5 years of service.

This is predicted to vary below the brand new labour code whereby an worker will probably be eligible for gratuity cost even after completion of 1 12 months of service. However, implementation of the identical has been postponed until 1 October, and is predicted to be delayed till the start of the subsequent monetary 12 months. The detailed tips and processes for a similar are additionally anticipated to be revised.

Under present guidelines, if a person is in steady service for 1 12 months or 6 months below the employer, he shall nonetheless be eligible to obtain gratuity payout provided that he for the stated interval, previous the date close to which calculation is to be made, has truly labored below the employer for not lower than 190 days and 95 days, respectively (in case of five-day work week in an organization).

Since you haven’t labored for the corporate for a minimum of 4 years and 190 days, you’ll not be eligible to obtain gratuity.

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