DSIJ Mindshare

Salaried employees may soon be eligible for Rs 20 lakh free gratuity

In a latest development and as a part of a triparite consultation, the formal sector workers may soon be eligible for Rs 20 lakh free gratuity as central trade unions have agreed on the proposal presented by the Ministry of Labour. The proposed amount was demanded to bring the maximum ceiling amount to Rs 20 lakh in-line with the 7th Pay Commission's recommendations. 

The amendment to the payment of gratuity act proposes to double the gratuity amount ceiling, to which the trade unions have agreed. However, they have demanded the removal of condition to have at least 10 employees in an establishment and minimum five years of service for the payment of the gratuity.

In addition to this, the unions have also demanded an application of the amended provision regarding maximum amount to be made effective from January 1, 2016 as done in the case of central government employees. Besides, they have also voiced their opinion for raising the provision of 15 days' wages to 30 days' wages, for each completed year of service. 

Nevertheless, the trade unions have also urged to delay the period of eight months covered under the payment of gratuity act, so that it may not affect the interest of the concerned employees. 

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