Gratuity Rule: Gratuity is discussed the most, although everyone knows that an employee gets gratuity after working continuously for 5 years in an organization. But let us tell you that now employees will get gratuity even if they have worked for less than five years. Let us know the rules of the government in the news below.
Gratuity is discussed the most in the salaried class, although everyone knows that an employee gets gratuity after working continuously for 5 years in an organization. But if you do a private job, then you should know that gratuity is available even in jobs of less than 5 years. There are some special rules for this. If you have any questions related to gratuity, your answers will be found below.
Question- What is gratuity?
Answer- Gratuity is given by the company to its employees. In a way, the company expresses gratitude to the employee in return for his continuous service.
Question- Are all private employees entitled to gratuity?
Answer- Payment and Gratuity Act applies to all factories, mines, oil fields, ports and railways in the country. Along with this, employees of shops and companies employing more than 10 people also get the benefit of gratuity.
Question- After how many years of work, gratuity is received?
Answer- However, employees who work continuously for 5 years in any organization become eligible for gratuity. But in some cases, the benefit of gratuity is available even for less than 5 years of service. ‘Continuous work’ has been clearly defined in Section 2A of the Gratuity Act. According to this, many employees can get the benefit of gratuity even if they have not worked for full 5 years.
Question- Is the benefit of gratuity available before 5 years?
Answer- According to Section-2A of the Gratuity Act, if the employees working in underground mines complete 4 continuous years and 190 days with their employer, then they get the benefit of gratuity. Whereas, employees working in other organizations become eligible for gratuity after working for 4 years 240 days (i.e. 4 years 8 months).
Question: Is notice period also counted in gratuity?
Answer- Yes, many people are confused about whether the notice period is counted in gratuity calculation or not? The rules clearly state that the notice period is counted towards ‘continuous service’, hence the notice period is added to the gratuity.
Question- How is the amount of gratuity calculated?
Answer- It is a very easy process, you can calculate your gratuity yourself.
Total gratuity amount = (final salary) x (15/26) x (number of years worked in the company).
Understand with an example: – Suppose you worked in the same company for 7 consecutive years. If the final salary is Rs 35000 (including basic salary and dearness allowance), then the calculation will be like this-
(35000) x (15/26) x (7) = Rs 1,41,346. An employee can get a maximum gratuity of Rs 20 lakh.
It is worth noting that according to the rules that are in place till now, for gratuity, it is necessary for the employee to be working in a company continuously for 5 years. However, the central government is considering reducing it to 3 years. If this happens, employees working in the private sector will benefit on a large scale.
