On December 18 2017, The Payment of Gratuity (Amendment) Bill, 2017 was introduced in Lok Sabha by Mr. Santosh Kumar Gangwar, Minister for Labour and Employment.  The Bill will amend various provisions in the existing Act- the Payment of Gratuity Act, 1972.

The Payment of Gratuity Act 1972 allows for the payment of gratuity to employees in any establishment, factory, mine, oilfield, plantation, port, railways, company, or shop employing 10 or more workers/employees.  At the time of termination employees are paid gratuity if they have provided at least five years of continuous service.

Under the present Gratuity Act, the maximum period of maternity leave available to female employees is 12 weeks (for the purpose of calculation of continuous service.  The Bill amends the provision to specify that the central government may notify the maximum time period for maternity leave.  Note that the Maternity Benefit (Amendment) Act, 2017 has already increased the maternity leave for the employees from 12 weeks to 26 weeks with effect from April, 2017.

Under the present Gratuity Act, the maximum amount of gratuity payable to an employee cannot be more than Rs 10 lakhs.  After this amendment this ceiling may be notified by the central government time to time based on the inflation, wage and future pay commission.

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