Legislation on payment of gratuity

Employees of any establishments in India, employing 10 or more persons, will have been affected by the new amendment in the Payment of Gratuity Act 1972 (amendment bill ) 2018 which came into force on the 29th March 2018.

Meaning, whereas, earlier the cap of the gratuity was fixed at 1million INR (India Rupee) it has been raised to 2million INR. This is also the case for the Federal (Central) government employees post the 7th pay commission.

Gender sensitivity

For the purpose of calculation of continuous  service for female employee, who are on maternity leave, the period of leave was increased from 12 weeks to 26 weeks.

Mode of retirement

The retirement may be induced by a result of superannuation, or physical disablement or impairment of vital part of the body; the retiree would have a social security legislation securing their post-retirement lifespan.

The amendment bring on par the two sector in terms of the ensuring social security. Still it at best fixes only an  upper limit.



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