Gratuity Rule Changes 2021

What are the changes applicable as per the new Gratuity rules made in 2021? What is the minimum tenure an employee should serve in an organization to be eligible for gratuity?

Hi Sagar,

The provisions of Gratuity will be covered under the Code on Social Security. Under this Social Security Code, the provisions of Gratuity remains the same except for a few add-ons viz.,:

i) Gratuity is payable on the termination of the contract period under fixed-term employment. The employer shall pay gratuity on a pro-rata basis and not on the basis of continuous service of five years.

ii) The amount of gratuity payable to an employee shall not exceed such amount as may be notified by the Central Government (20 lac threshold will be removed).

iii) The working journalist’s gratuity threshold period gets reduced from five to three years.

Regards,
Bhuvana Anand

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