Can Gratuity be availed before five years? There will be a change in Rules


Gratuity Rules: The central government is considering relaxing the eligibility conditions for payment of gratuity for employees. The central government is considering reducing the time limit of gratuity payment for employees from five years to between one and three years. According to the official, keeping in mind the nature of India’s labor market, where most of the workers are employed for only a short period. In view of this, there is a demand to reduce the problem of getting gratuity. In view of this, the government is considering ways to relax and implement its condition. 

The Parliamentary Committee on Labor, in its recently presented report, has said that the current five-year time limit for eligibility for gratuity payment should be reduced to one year. Explain that gratuity paid to an employee is paid on the basis of 15 years salary per year, depending on the year of the employee’s work in the company. This payment is received only after the employee completes five consecutive years in a company.

Labor experts also said that the five-year limit for gratuity is old and it no longer works in the interest of employees. Labor unions claim that many companies remove employees before five years to save costs so that their gratuity costs are saved. RP Yadav, chief executive of Genius Consulting, said that the five-year deadline for gratuity was introduced to promote the culture of long working hours. He said that now the gratuity deadline of two or three years would be a better option.

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What is eligibility according to rules?

According to the rules of the Gratuity Payment Act 1972, the amount of gratuity can be up to a maximum of 20 lakh rupees. For gratuity, it is mandatory for the employee to work in the same company for at least five years. In the event of a job done for less than this time, the employee is not entitled to gratuity. That is, gratuity is not available even after leaving the job in four years and 11 months. Any company, factory, institution where 10 or more employees have worked on any one day in the last 12 months is subject to the Gratuity Act. 

What is gratuity?

Gratuity is a pre-defined benefit to an employee. If the employee fulfills certain conditions of the job, gratuity will be paid to him under a prescribed formula in a guaranteed manner. Under the current rule, if you work for five consecutive years in an institution, then you get the benefit of gratuity. However, the employee on track does not get this benefit. 

When do you get gratuity?
– The employee can apply for withdrawal of gratuity after leaving the job.
– The payment is made within 30 days from the date of application. 
– If the company does not do so, then it will have to pay interest on the gratuity amount.

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