{"id":1474,"date":"2025-11-22T04:33:35","date_gmt":"2025-11-22T04:33:35","guid":{"rendered":"https:\/\/newsraise.com\/in\/?p=1474"},"modified":"2025-11-22T04:33:35","modified_gmt":"2025-11-22T04:33:35","slug":"employees-to-get-gratuity-after-1-year-key-changes-in-indias-labour-laws","status":"publish","type":"post","link":"https:\/\/newsraise.com\/in\/2025\/11\/22\/employees-to-get-gratuity-after-1-year-key-changes-in-indias-labour-laws\/","title":{"rendered":"Employees to Get Gratuity After 1 Year: Key Changes in India\u2019s Labour Laws"},"content":{"rendered":"\n<!-- Quick Adsense WordPress Plugin: http:\/\/quickadsense.com\/ -->\n<div class=\"9fece8afa224fd09e54b043d0febfb58\" data-index=\"1\" style=\"float: none; margin:10px 0 10px 0; text-align:center;\">\n<script async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js\"><\/script>\r\n<!-- NR ATF -->\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block\"\r\n     data-ad-client=\"ca-pub-8898941184964366\"\r\n     data-ad-slot=\"4839033563\"\r\n     data-ad-format=\"auto\"\r\n     data-full-width-responsive=\"true\"><\/ins>\r\n<script>\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script>\n<\/div>\n<p data-start=\"247\" data-end=\"631\">The Labour Laws are set to undergo a major overhaul, as the Union Labour Ministry announces new Gratuity reforms in a historic move.<\/p>\n<p data-start=\"247\" data-end=\"631\">In a major labour reform move, the Union Government has revamped India\u2019s labour framework, bringing significant relief to fixed-term employees across industries. Under the new labour codes, fixed-term workers will now become eligible for gratuity after completing just <strong data-start=\"516\" data-end=\"539\">one year of service<\/strong>, a sharp departure from the earlier requirement of <strong data-start=\"591\" data-end=\"630\">five years of continuous employment<\/strong>.<\/p>\n<p data-start=\"633\" data-end=\"1087\">The Labour Ministry stated that this restructuring aims to offer <strong data-start=\"698\" data-end=\"789\">better wages, wider social security coverage and stronger health and safety protections<\/strong> for workers, spanning both formal and informal sectors. With 29 labour laws now consolidated into four simplified labour codes\u2014<\/p>\n<ul>\n<li data-start=\"633\" data-end=\"1087\">Code on Wages<\/li>\n<li data-start=\"633\" data-end=\"1087\">Social Security Code<\/li>\n<li data-start=\"633\" data-end=\"1087\">Occupational Safety Code, and<\/li>\n<li data-start=\"633\" data-end=\"1087\">Industrial Relations Code<\/li>\n<\/ul>\n<h3 data-start=\"1094\" data-end=\"1141\"><strong data-start=\"1098\" data-end=\"1141\">Who Qualifies as a Fixed-Term Employee?<\/strong><\/h3>\n<p data-start=\"1143\" data-end=\"1512\">A fixed-term employee is someone hired under a contract that clearly defines a specific end date or concludes once a particular project or task is completed. These reforms extend benefits to not only traditional employees but also <strong data-start=\"1374\" data-end=\"1447\">gig workers, platform workers, migrant labourers, and women employees<\/strong>, helping bridge long-standing gaps in India\u2019s diverse workforce.<\/p>\n<h3 data-start=\"1519\" data-end=\"1563\"><strong data-start=\"1523\" data-end=\"1563\">1-Year Gratuity Rule: A Game Changer<\/strong><\/h3>\n<p data-start=\"1565\" data-end=\"1846\">Previously, the Payment of Gratuity Act mandated a minimum of five years of service before any employee could claim gratuity. The new labour codes waive this requirement for Fixed-Term Employees (FTEs), enabling them to receive gratuity after just 12 months of service.<\/p>\n<p data-start=\"1848\" data-end=\"2011\">The Labour Ministry emphasised that the intent is to bring FTEs on par with their permanent counterparts in terms of employment benefits. As per the updated rules:<\/p>\n<ul>\n<li data-start=\"2015\" data-end=\"2084\">FTEs will receive the <strong data-start=\"2037\" data-end=\"2062\">same salary structure<\/strong> as permanent staff.<\/li>\n<li data-start=\"2087\" data-end=\"2190\">They will also enjoy similar <strong data-start=\"2116\" data-end=\"2187\">leave benefits, medical facilities, and social security protections<\/strong>.<\/li>\n<li data-start=\"2193\" data-end=\"2355\">The new policy is expected to reduce the growing reliance on long-term contract staffing and nudge companies toward <strong data-start=\"2309\" data-end=\"2354\">more transparent, direct hiring practices<\/strong>.<\/li>\n<\/ul>\n<h3 data-start=\"2362\" data-end=\"2395\"><strong data-start=\"2366\" data-end=\"2395\">What Exactly Is Gratuity?<\/strong><\/h3>\n<p data-start=\"2397\" data-end=\"2842\">Gratuity is a lump-sum financial benefit that an employer pays an employee as a mark of gratitude for their service. Traditionally awarded upon retirement, resignation or job separation, gratuity provides a financial cushion during employment transitions. By reducing the eligibility period to one year for fixed-term workers, the government aims to offer greater security and stability, especially for employees engaged in short-duration roles.<\/p>\n<p data-start=\"2844\" data-end=\"3143\">The Payment of Gratuity Act applies to a broad range of establishments such as factories, mines, railways, ports and oil fields. Although earlier discussions hinted at reducing the eligibility requirement to three years, the final decision to lower it to one year marks a far more progressive shift.<\/p>\n<h3 data-start=\"3150\" data-end=\"3188\"><strong data-start=\"3154\" data-end=\"3188\">How to Calculate Your Gratuity<\/strong><\/h3>\n<p data-start=\"3190\" data-end=\"3249\">The gratuity amount is calculated using a standard formula:<\/p>\n<p><strong data-start=\"3251\" data-end=\"3314\">Gratuity = Last Drawn Salary \u00d7 (15 \u00f7 26) \u00d7 Years of Service, <\/strong>where\u00a0<em data-start=\"3316\" data-end=\"3376\">Last drawn salary includes <\/em><\/p>\n<p><strong><em data-start=\"3316\" data-end=\"3376\">Basic Pay + Dearness Allowance.<\/em><\/strong><\/p>\n<p data-start=\"3378\" data-end=\"3522\"><strong data-start=\"3378\" data-end=\"3390\">Example:<\/strong><br data-start=\"3390\" data-end=\"3393\" \/>If an employee completes eight years of service with a last drawn Basic + DA of INR 40,000:<br data-start=\"3481\" data-end=\"3484\" \/>40,000 \u00d7 (15 \u00f7 26) \u00d7 8 = <strong>INR 1,84,615\/-<\/strong><\/p>\n<p data-start=\"3378\" data-end=\"3522\">The revised gratuity rule is expected to empower millions of fixed-term employees by giving them faster access to financial benefits. At the same time, employers may benefit from improved morale, reduced attrition, and a more committed workforce. As India moves toward a more flexible yet secure labour ecosystem, the updated codes mark a significant step in modernizing worker welfare in the country.<\/p>\n\n<div style=\"font-size: 0px; height: 0px; line-height: 0px; margin: 0; padding: 0; clear: both;\"><\/div>","protected":false},"excerpt":{"rendered":"<p>The Labour Laws are set to undergo a major overhaul, as the Union Labour Ministry announces new Gratuity reforms in a historic move. In a&#8230;<\/p>\n","protected":false},"author":4,"featured_media":1475,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[299],"tags":[991,988,993,985,994,987,997,995,990,996,986,989,992],"class_list":["post-1474","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-employee-benefits-india","tag-fixed-term-employee-gratuity","tag-fixed-term-employment-rules","tag-gratuity-after-1-year","tag-gratuity-calculation-formula","tag-gratuity-eligibility-2025","tag-gratuity-news-india","tag-indian-labour-laws-2025","tag-labour-law-reforms-india","tag-new-gratuity-rules","tag-new-labour-codes-india","tag-payment-of-gratuity-act-changes","tag-social-security-code","entry"],"_links":{"self":[{"href":"https:\/\/newsraise.com\/in\/wp-json\/wp\/v2\/posts\/1474","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/newsraise.com\/in\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/newsraise.com\/in\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/newsraise.com\/in\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/newsraise.com\/in\/wp-json\/wp\/v2\/comments?post=1474"}],"version-history":[{"count":1,"href":"https:\/\/newsraise.com\/in\/wp-json\/wp\/v2\/posts\/1474\/revisions"}],"predecessor-version":[{"id":1476,"href":"https:\/\/newsraise.com\/in\/wp-json\/wp\/v2\/posts\/1474\/revisions\/1476"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/newsraise.com\/in\/wp-json\/wp\/v2\/media\/1475"}],"wp:attachment":[{"href":"https:\/\/newsraise.com\/in\/wp-json\/wp\/v2\/media?parent=1474"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/newsraise.com\/in\/wp-json\/wp\/v2\/categories?post=1474"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/newsraise.com\/in\/wp-json\/wp\/v2\/tags?post=1474"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}