The Cabinet has approved an amendment to the Gratuity Act to raise the ceiling from Rs 3.5 lakh to Rs 10 lakh. Every salaried person, who has completed five years of government or private sector service, is eligible for half a month's salary as gratuity for every completed year of service. However, the gratuity pay of those with higher salaries is currently limited at Rs 3.5 lakh. The proposed amendment raises this limit to Rs 10 lakh.
Every employer with more than ten salaried workers is mandated to provide gratuity to the eligible employees. Many companies, however, do not keep the gratuity liability adequately funded. They make provisions for future payment but do not set aside funds for it. Listed companies are expected to disclose their gratuity liability.
Every employer with more than ten salaried workers is mandated to provide gratuity to the eligible employees. Many companies, however, do not keep the gratuity liability adequately funded. They make provisions for future payment but do not set aside funds for it. Listed companies are expected to disclose their gratuity liability.
1 Attachment(s) [Login To View]