Gratuity Rules To Be Changed…Bill Tabled In Parliament

The Government Of India tabled the Payment of Gratuity (Amendment) Bill 2017 amid chaos in the parliament. All the employees working in mines, plantations, oil fields, factories, shops, railways, ports or other establishments come under the purview of the Gratuity act, if they have been in service continuously for at least 5 years in an organization having 10 or more employees.

Gratuity Rules To Be Changed...Bill Tabled In Parliament

While currently the maternity leave for female employees is 12 weeks, for which they are deemed to be in “continuous service” in the past bill. The new bill proposes to increase the leave period from 12 weeks to 26 weeks.

The amendment comes in the wake of changes made to the Maternity Benefit Act, which is amended to allow up to 26 weeks of maternity leave instead of 12 weeks earlier. Thus, the Gratuity Act is proposed to be amended to keep it in line with the changes made in the Maternity Benefit Act.

The gratuity is calculated as 15 days wage for each completed year of service. The maximum amount that can be availed of in gratuity is Rs.10 lakh, as per the amendments made in 2010.

Following the 7th Central Pay Commission, the cap of Rs. 10 lakh in gratuity for the employees of Central Government, stands increased to Rs. 20 lakh.

“The provisions in the Gratuity Act are in accordance with the recommendations made by the Central Pay Commission. As such, given the current rate of inflation and increase in wages employed in the public and private sector, the Gratuity entitlement needed to be duly revised for the employees who are under the purview of this Act,” it read in a statement.

Further, the statement also proposes that the Central Government be notified of the proposed ceiling instead of having to amend the Act. This is to facilitate making changes in the act from time to time, keeping in line with the changes in inflation rate, wages and the recommendations of the future Pay Commissions.

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