There is some good news for all the people who have jobs. The gratuity rules are changed for employees. Parliament has passed three Labor Code Bills. These include the Occupational Safety, Health, and Working Conditions Bill for 2020, the Industrial Relations Bill for 2020, and the Social Security Bill for 2020. The rule of gratuity is explained in Chapter 5 of the Social Security Bill, 2020. The ppf calculator can help you manage your funds according to the latest rules and save you from tiring calculations.
Gratuity at a Glance
First of all, we know about gratuity. Along with salary, pension, and provident fund, employees who have worked for the same company for a long time also get gratuity. Gratuity is what an employee gets from the company as a reward.
Gratuity will be paid to the worker according to a set formula and is guaranteed if he or she meets certain job requirements. A small amount of gratuity is taken out of an employee’s paycheck, but most of it is paid by the company.
Who will Benefit from the Gratuity Act of 2020?
The benefit will go to contract workers, but fixed-term employees won’t have to work for at least a year to get it. Under this, there is a plan for fixed-term employees to get their gratuities. And there will be no minimum service period requirement.
For the first time, a fixed-term worker who works for a set amount of time gets the same social security benefits as a regular worker. The employees who work on the contract are called “fixed-term.”
It is possible that people will still follow the old rule. For example, at the moment when a person has worked for a company for five years, they get 15 days of pay as a bonus. The company gives the gift to the workers as a thank you. Its maximum limit is 20 lakh rupees. The employee worked for the same company for 20 years, and his last pay was Rs. 60,000. This salary is split into 26 parts because gratuity is counted as 26 days. This will give you a total of Rs 2,307.
Now, When will You Get the Gratuity money?
Chapter 5, says that an employee will get a bonus if they have worked at the same job for five years in a row. It will end when the person retires, quits, dies, or is unable to work because of an accident or illness. But a working journalist will only have to wait three years instead of five. Also, you won’t need to have worked for the same company for five years in a row if an employee dies, becomes sick, or has a fixed-term job, or if the central government gives you any other kind of notice.
According to the Gratuity Act of 1972, an employee gets 15 days’ pay as a bonus for every year of service. In this act, “employees” are people who are on the company’s payroll. Trainees don’t get any extra pay. Up to 20 lakhs of gratuity money is tax-free, and this law applies to businesses with at least 10 workers. There is no need to be worried about gratuity calculations according to the latest rule. There are lots of calculators available to calculate gratuity online. They can save you from tiring calculations.